Foreclosure property in Kansas City is still a hot topic. Though not boiling over as it was a couple years back. Still, not a week goes by that a stranger will call and ask about entering the foreclosure market. Or bank owned homes, whatever you want to call them.
Here are a few facts as I see them regarding Kansas City and the foreclosure boom;
- Missouri has more foreclosures than Kansas
- Kansas City, MO proper has a higher foreclosure rate than either the Missouri or Kansas suburbs
- That said, Kansas City is WAY below the foreclosure hotbeds of Ohio, Michigan, California, Nevada and Florida (Click here to see heat map.)
- Foreclosure properties are not nearly as profitable as the public thinks
- Banks are not giving away homes
Is there money to be made buying bank foreclosures in Kansas City?
Yes. But you’ll need cash on hand. Both for the down payment and the necessary updates and repairs. I’ve never seen a bank foreclosed house that didn’t need at least carpet and paint. Most need significantly more repairs and/or rodent/flea controls.
A good model? Buy a foreclosure and rehab and then rent. A sure way to have a jump start on equity and to keep your overall costs low compared to a buyer going straight retail.
A better model? Buy a pre-foreclosure. Pre-foreclosures are homes that are steamrolling into foreclosure that have some equity in them that will allow you to “buy-out” the existing homeowner and do the necessary repairs and still make money. This also involves short sales. It’s a very complicated process. Well, more time consuming than complicated.
We put in an offer 63 days ago on a short sale house over in Kansas City, Missouri. 63 days. Consistent follow ups by the listing agent (and I’m sure he got tired of hearing from me) finally yielded a response yesterday. The response from the loan servicing company was that if we could close with cash on Thursday (that’s THIS Thursday…two days from today) they would accept our offer.
So let me get this straight. We have to wait and wait and wait and wait and wait and then jump on your request on a day’s notice? Well, yes. And of course the buyer is going to do it because he’s going to have equity city when the sale is completed. But what a hassle. And not a lot of buyers are set with cash ready to go…know what I mean.
The foreclosure market can be profitable. It can also be annoying. Scary at times, too. (Ever walk into a vacant home only to hear rustling noises and when you walk into a back bedroom you find an open window, the smell of a freshly smoked cigarette and fresh urine in the closet?)
So my advice is to think twice before delving into bank owned homes (aka REO – real estate owned) or HUD homes, as well. The foreclosure market can be profitable and exciting. But trust me, it’s not for everyone.
Still not scared? Then give me a call and I’ll help you through the process of buying foreclosed homes. But be forewarned. I don’t mess with $5,000 or $10,000 houses. Not my style. In neighborhoods I don’t feel safe, generally. And I don’t see the long term rewards in them. But still feel free to give me a call to discuss. Just dial 913.568.1579 to discuss buying Kansas City bank owned homes.