First Time Home Buyers In Kansas City
True, the bulk of my business is working with the real estate investors in Kansas City. It’s what I do. It’s what I like to do. But…
I just (literally) walked out of a closing with a first time home buyer who purchased her first home in Kansas City, Kansas. Just above the Johnson County line. She’s a single lady, which is a fast growing segment of the home buying public. She’s also a twenty-something.
It warms my heart to see someone so young, so responsible and so visionary. She knew what she wanted, stayed within her budget and when all was final she had purchased a newly rehabbed home in a safe neighborhood with no money down (at a good, fixed interest rate) and is paying less for her house payment than she was for her monthly rent.
And you know what? Because of the time we spent together in the car she’s already talking about how it would be nice to live there for 2-3 years, put together some more savings and purchase another home to live in and renting out this home.
Wouldn’t that be great?!? If she were to buy another home in 2-3 years after creating more savings (I gave her a target to shoot for) she would be so far ahead of most of us at that age it wouldn’t even be funny. Imagine being 29 and having a good primary home and a good rental home…all on a very modest salary.
Anyway, I just thought you might like this warm and fuzzy story.
Filed under Personal Real Estate Opinions, Social Issues
Kansas City Real Estate Investing Thoughts
Have you been paying attention to interest rates? I just had an investor lock in at 5.875% on a non-owner occupied investment property here in the Kansas City area. Do you think that helps cash flow? 🙂
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It’s been so freaking cold here lately (it’s 2 degrees as I write this) that I stopped by a vacant house one of my clients has to make sure all the water pipes were not frozen. Since they are claiming we’ll get up to the 50’s on Sunday and Monday (I hope that is true.) you might want to check out your vacant rental property to be sure, as well. You don’t want a frozen pipe thawing an then running water everywhere.
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I’ve been noticing a definite increase in interest in the Kansas City real estate investing market. In the last 5-8 days I have spoken to people from Sacramento & San Francisco & Los Angeles, California, also Seattle, Washington, New York, New York and Pensacola, Florida.
People are looking for a stable market in which they can park some of their equity in real estate. All I have to say is “Bring it on.”
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Just in case you have not been paying attention, my beloved Kansas Jayhawks are now 19-0. And they look good.
Filed under Misc. Real Estate
Reviewing Your Rental Property
One of the things I think helps to let your tenants know that you care about your rental property is when you occasionally assist with routine maintenance. Now, this could be you or your property manager. Either way, you want to convey the message that it’s important to take care of your rental property.
Here in Kansas City our rental properties have probably had the furnaces running almost non-stop for the better part of two months, save a temperate day or two here and there. This will not only put a little bit of a financial hurt on your tenants, it’s been heck on your furnaces.
So, what we can do is kill two birds with one stone. Maybe even three! I suggest that you, or your property manager, take over to each of your property units a set of new furnace filters and replace them. Why would this be good?
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As I said, it shows you care about the maintenance of your rental property. And a dirty furnace filter is tough on the furnace. Even if the tenant does periodically change it, it’s like oil. You can’t change too often.
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It will show the tenant you are thinking about them. It saves them only a few bucks and a couple minutes of time. But it is the thought that counts, right?
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It allows you, or your property manager, to get inside and casually check out the condition of your rental home. Dogs that aren’t supposed to be there? Massive carpet stains? Problems of any kind?
Many a time I speak with income property owners who tell me the horror stories of what their tenants did to their houses. Almost to a person they also admit that neither they nor their property manager had visited the home while the tenants were under lease. In my mind, that is a mistake.
Filed under Property Management
Investor’s Beware
The following guest post is brought to us by Shaun Kilburn of AAA Insurance. Be easy on him. 😉 It’s his first post!
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Investment properties are a wonderful asset and provide both short term and long term earning power on your money. As an insurance agent and property investor I find it hard to believe that owners of properties don’t shore up their risks in several key ways. The hard truth about liability insurance is that as your assets go up so should your liability insurance. Your primary residence has normally up to $500,000 worth of available liability protection. But what happens when your net worth starts creeping up over that amount? Well you had better start by speaking with a reputable insurance agent. Your assets are vulnerable to law suit once you have more than your home or umbrella insurance policy allows.
Many properties start to become more valuable than previously thought as your rents go up whether the market is moving sideways. Your primary residence, investments property, and assets not in a trust will be discovered by an opposing attorney who has done an asset search in the event of a lawsuit. Your umbrella policy should be valuated at more than you are being sued for. The attorney can chose to sue you as the policy owner or you as the individual based on where there is more money. All the attorney has to do is sue for more than the liability limit will cover. If your worth is more than the liability limit on your policies, look out, you’re in for a bumpy ride.
All this anguish can be avoided by taking out a simple umbrella or excess limit liability policy. They are the cheapest form of insurance and although a million dollar policy sounds expensive they usually run less than $200 a year. That’s right, less than $200 and you are as close to bullet proof as you’re ever going to get. Do yourself a favor today and call a reputable insurance agent with at least an A rated company (A.M. Best). Your investments are too valuable to leave to chance.
Another area of concern is making the appropriate disclosures as to the type of policy you carry on an income property. There are many kinds of policies from straight renters to builder’s risk, non-occupied dwelling, improvements and betterments policies etc.
Each time you change the parameters of the original contract, you need to contact your insurance agent as you may find yourself with no coverage in the event of a loss. Most companies do not like non-occupied dwellings. If you started out with an occupied unit when you signed the contract, and your property becomes vacant for an extended period of time, say over 60 days, you may find that you need to change your property to a non-occupied policy or at least disclose your situation to your agent and go from there. Many times the insurance company will work with you, and as long as it is documented that your situation has changed. In the event of a loss if you have notified your agent then when the claims adjustor does a loss assessment any changes in occupancy or other structural changes will be accounted for and your policy will most likely pay out.
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For questions or quotes you can contact Shaun Kilburn of AAA Insurance at:
816.931.5252 x 173
skilburn(at)aaamissouri(dot)com
Filed under Legal Issues, Misc. Real Estate, Preferred Vendors
Meme Time
There’s an annoying tradition on blogs. It’s called being Meme’d. Now that I’ve been tagged by Lani I have to tell you 7 things about myself and then pass this annoyance on to other people. Sort of like the change letter from Hell.
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I started losing my hair when I was 18.
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My favorite bar when I was in college was Louise’s. It’s still there.
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I was enrolled at KState right up to the minute I actually came to my senses and went to Kansas.
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I love Mexican food as much as BBQ.
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I have been shot at. (And it wasn’t because of my sarcastic humor.)
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One day I want to skydive.
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I’d risk everything for a chance in outer space.
Now I’m going to tag Jeff, Christopher, Pat, Bill, and, ah, heck…that’s enough for Pete’s sake.
Filed under Uncategorized
Ridin’ The Storm Out
Kevin Cronin and REO Speedwagon once sang
Ridin’ the storm out,
waitin’ for the fallout…
I must confess right here it’s one of my favorite songs, ever. But I don’t like it when it concerns real estate investing. Fortunately, here in Kansas City our income property hasn’t had too much fall out. But around the country? Forget about it.
Because the California and Florida and Las Vegas markets have experienced tremendous fallout many people in more stable markets like Kansas City, Charlotte, Tulsa and Dallas still feel apprehensive about moving forward with acquiring more investment property.
So I wanted to give you some food for thought. First, I like what Christopher Smith over at Equity Scout has to say on the subject in his post titled Five approaches to today’s soft real estate market. Read it and see what you think.
Here Are My Thoughts
If you have a non-performing property right now, sell. No if’s ands or buts. I don’t care if you lose money on the sale. What would you rather do? Continue to lose money every month indefinitely? If it’s a non-performing property in a less than desirable location cut your losses and run.
If you have an under-performing property right now, hold. Maybe you counted on appreciation to get the price up quickly so you could raise rents. Maybe you counted on rents rising faster than they did. Either way, whatever small amount you might be losing will probably be offset when the market begins to rebound. Will that be next year? I don’t know, either. But depending on your situation I would advise you to hold tight.
If you are lacking leverage, go ahead and exchange. So you sell for a bit less than you want to because it’s a buyer’s market. Guess what? Whatever you buy you’ll be able to buy for less than that seller wanted to sell because it’s a buyer’s market. 🙂 What’s more important here is keeping your capital growth on track to get to your retirement on or ahead of time. Not whether you bled every penny out of your property that you had hoped to get.
If you have cash now (or assets) and are thinking about more property, buy. It’s never been easier to buy at or below market here in Kansas City. And believe it or not we still have areas of modest appreciation. Call or email me for specific examples.
Of course, everybody’s situation is a little unique. These are generalizations and not intended to be specific advice to anyone. We’ll have to sit down over a coke to see when and where you should go.
BBQ Capital | Kansas City Real Estate Investing 