Q: I’m looking to wholesale homes to investors in the Kansas City area. I’d like to know the answer to one question. What are the top 3-5 things Kansas City investors / landlords look for in a property they’d be eager to buy?
A: I have wholesalers call me each and every week. All believe or hope that I may have a stable of ready buyers for their properties.
In no way will I want to appear rude here, but usually if a wholesaler is involved the numbers will not match up with the expectations of most of my more experienced buyers. Because that’s just one more layer of expenses that have to be worked through to see if the numbers work.
Top 3-5 Things A Kansas City Real Estate Investor Is Looking For
- Price/Value/Equity– Whether my buyer is looking to Buy & Hold, Rehab & Rent or is daring enough to Buy, Rehab & Sell they will all be looking very closely at the numbers. Buy & Hold is probably willing to accept up to 85%-90% of CURRENT market value after all update expenses and closing costs. Whereas a Rehab & Rent guy will probably be looking for a ceiling of 75%-80% of CMV and a B,R & S guy will be looking at 60%-70% of CMV.
- Location – This depends on the budget, down payment, credit scores and end-use goals of the individual investor but you can expect most of my buyers to be looking at clean, safe neighborhoods where appreciation is more the expected than the exception. Even in this economy. Jeff Brown calls it the Grandmother Test. (If grandma wouldn’t spend the night there maybe you need to reconsider.)
- Exit Plan – Is this neighborhood likely to increase in value, stay the same or sink a little? Who is moving in? (People making more money than their neighbors or less?) Are they taking care of their houses? Any new development, both positive and negative, expected for the area in the next 3-10 years?
- Tenant Pool – What kind of tenants will this property attract? Are there enough of those kinds of tenant about? Where will they come from? Where do they work?
Wholesaling tends to take place in the less than $70,000 price range around most of Kansas City. It does happen some over that price range, but not nearly as much.
If a house meets the criteria of the above I’m always willing to look at it. Just email me the needed information. listwithchris at kw.com