Category Archives: Kansas City Real Estate

KW MAPS Coaching

So here is a fun fact; I am now a KW MAPS Coach.

Kansas city real estate investing

In addition to my duties as Broker/Owner of Ad Astra Realty, Inc ( a Kansas City property management company) I am also the Team Leader of Keller Williams Realty, Diamond Partners, Inc of Olathe, Kansas.  Those two positions are not new and many of you already knew that.

Recently, because of our success at building KW’s Olathe office, MAPS, an agent and leadership coaching company for Keller Williams, asked if I would also coach other Team Leaders for KW around the country. Sounded like fun, so here I am.

Real estate has been a very good business for me.  I want to thank all those who have provided this opportunity to me.  My thankfulness starts with each and every client that has entrusted me/us over the years to help them with their buying, selling and/or investment real estate needs here in the Greater Kansas City area.  My thankfulness also extends to;

  • My wife and family for all the time missed
  • Randy Lindemuth, my first broker at Scott Douglas Realty down in Tulsa
  • The staff, past and present, of Ad Astra Realty
  • Larry Kueser who offered me the position of Team Leader at KW
  • Dianna Kokoszka for offering the position of MAPS Coach to me
  • Mike Bastian for modeling what a coach can do for a real estate agent and team leader

There are so, so many people to thank.  We still stand ready to help you with any of your real estate investing needs here in Kansas City. We offer accountability, honesty and a sincere effort and professionalism to help you with your “Retirement worth having.”

Thank you everyone for everything you’ve done.  Ya’ll rock.

 

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Filed under Kansas City Real Estate, Misc. Real Estate, Personal Real Estate Opinions

2018 Kansas City Real Estate Investing Outlook

Hello All. Welcome to the New year.  Here is my 2018 Kansas City Real Estate Investing Outlook for both Sales and Property Management.

REAL ESTATE SALES: BUYING, SELLING, INVESTING

A Quick Look Back at 2017

Wow! What a year 2017 has been in the residential real estate world.  Here in the Kansas City area we’ve seen appreciation as high as 11% in Johnson County, KS and generally above 7% throughout the metropolitan area. It was not unusual for houses to be on the market less than 10 days if they were in good condition and priced right.

Looking Ahead in 2018 

Chris’ opinion about 2018?  It will closely follow 2017’s arch but it will be slightly more muted.  Listen, 11% appreciation is simply not sustainable in Kansas City over the long term. Housing affordability is becoming a worry even here in the middle of the country, interest rates are looking like they will tick up (though Chris has been thinking this for YEARS!) and until wages begin to catch up we will continue to decrease the amount of qualified first-time home buyers.

In conclusion, Chris thinks 2018 will be another great year for sellers, slightly better for buyers and another very good year to be a real estate agent.

PROPERTY MANAGEMENT

A Quick Look Back at 2017
The rental market continues to be very, very strong in Kansas.  However, on the Missouri side we began to see a slide in occupancy rates.

Kansas’ vacancy rates in Johnson County continue to hover at about 5%.  Missouri is creeping north of 8%. We have also noticed greater effort expended in finding the same standard of applicants as in the recent past.  This makes sense since so many of the buyers driving the sales side of the market are leaving the life of tenancy.

We have noticed that many of our tenants that experienced hardships in the Great Recession have rehabilitated their credit and are now buying.

Looking Ahead in 2018 
Tenants continue to rehab their credit and/or begin to look towards owning their own homes, especially in the Millennial Generation.  The nomadic life the Millennials have clung to is beginning to give way to the responsibilities of adult-hood and looking towards securing wealth and personal home ownership.

Chris won’t be surprised at all if vacancies continue their correction toward the historical number of 10%.  This will be a shock to the system of many investors who have entered the market since 2008.

 

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Filed under Kansas City Real Estate, Property Management, Real Estate Investing

2018 Housing Forecast

If you are looking to buy or sell real estate in the great state of Kansas in 2018 you may wish to watch this 3:44 minute video provided by Wichita State University.

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Filed under Kansas City Real Estate, Uncategorized

Is It Time To Evaluate Your Investment Property

The New Year is fast approaching and I have to ask; Is it time to evaluate your investment property?

Many of our clients purchased their rental properties during the Great Recession.  They bought low and now may be the time to sell high.  Or is it?

The very first thing you need to know in order to make an intelligent decision is to get a comparative market analysis of your income property.  Listen, it doesn’t have to be detailed.   But if you can be plus or minus 3%-5% you can have a good idea as to how to measure your future options.

  • Should I continue to hold because I’m making good money on my investment?
  • Should I 1030 Exchange myself in to fewer but more valuable income properties?
  • Should I sell, pay the tax and relax?

There are, of course, a few other options and variables not the least of which is “where are you in your life?”  What I am saying is that the real estate market in Kansas City has changed by leaps and bounds since 2009 and so may have your investment needs.

So, is it time to evaluate your investment properties?  If it is, give me a call at 913-568-1579.  I’d love to help.

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Filed under 1031 Exchange, 4 Benefits of Real Estate Investing, Kansas City Real Estate, Real Estate Investing, Uncategorized

REALTOR Referrals for Kansas City Income Property

 income property referrals

Ad Astra Realty works with real estate investors every day.  We manage over $26,000,000 in assets here in Kansas City.  We know investment and income property.

We also know that many of our readers here at BBQ Capital are real estate agents. We just want you to know that we are happy to work with your real estate and property management referrals.  You can read our Realtor Referrals web page to find out more.

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Filed under Investment Property, Kansas City Real Estate

Investment Property Case Study

Real estate investment gurus love to talk in terms of “no guarantees”, pro formas and about deals from 10+ years ago. But I want to give you an Investment Property Case Study from right here in the Kansas City real estate investing universe.  The following is real though I will not give addresses or client names, etc.  Not only is it real, it’s still going on right now.

THE SET UP
In 2011 I had two fund managers from the Los Angeles area of California come meet with me about investing in rental property here in Kansas City.  They wanted returns formulated on rents being two times investment.  That is to say they wanted an all in price (purchase, closings costs, rehab) to be $40,000 if the rents were $800/mo.  Easier said than done in any neighborhood you’d actually want to live in.

So I took them out and showed them around.  Then I sat with them and asked me to make it more of a 1.6 ratio or 1.7 to get in to better neighborhoods with better houses and better schools. After showing them what I could do, I went to work.

ACQUIRING RENTAL PROPERTIES
From May of 2011 to March of 2013 we acquired 56 rental properties.  Most were in 2011-2012 when the market was just waking up from it’s downfall in 2008-2010. What would these numbers show if we had started acquiring in 2009!!!????!!! Most of the properties were 3 bedrooms with 1-2 baths.  All were in Missouri in Kansas City, Raytown, Independence, Grandview, Gladstone, etc.

PURCHASE, REHAB, RENT
After the closing we would set to work rehabbing to rental standards.  Then rent at or slightly below market as quickly as possible.  With this strategy we’ve been able to hold these properties to about 6% vacancy.  All investment properties were paid for with cash.

THE MATH
I’m not going to break down everything. Not for this post.  But most of the expenses listed below were generated in the first 30-40 days after purchase…during the rehab portion of the property life. The rest of the expenses have been since they have been generating income with tenants in them.  Expenses include repairs, rehabs, insurance, management, utilities when vacant…literally everything except taxes, which will add up.  The income has been generated from the first tenant through to today.

THE RESULTS
Here you go.  This is why owning rental property is a great investment.

Purchase & Closing Costs          $1,944,191
Expenses                                       $1,267,330
Total Investment to date    $3,211,521

Total income to date             $1,212,159  

CURRENT VALUE
The current value is based on comps with minimal additional repairs/improvements to the income property.     The cost of sales would have to come off the value including but not limited to repairs for inspection requirements, realtor fees, closing costs including title fees, etc.  Figure about 12% -15% cost of sales with all that in mind.

Current Value                          $3,807,500

Now there are differing ways to calculate your returns and I’m not going to go in to details because of the spread of months between the first and last purchase, time line of the repairs, etc.  But no matter how you look at it the real estate investors that came to Kansas City have come out okay.

Fusing these two sets of results is my favorite way to look at it.

Current Value                                $3,807,500
Purchase Price + Initial Rehab  $2,792,623
Cost v Value Differential     $1,014,877

Total income to date                   $1,212,159
Expenses since rehab                 $ 420,398
Positive Cash Flow                 $791,761

As I said there are professional accountants out there that will give you several different formulas and of course all of this does not include the property taxes, as I noted above.  Those taxes could add up to a takeaway of about $90,000.  I just don’t want to take the time at this time to go in and add them all up. But in any case, those numbers are significantly better than the numbers my IRA returns.  🙂

Now, you may not have $3M to invest. Neither do I. But you can do one house. Or two.  Get started today.  Your retirement will thank you later.

If you have any questions about investing in real estate here in the Kansas City area, please, do not hesitate to contact Chris Lengquist at 913-568-1579.

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Filed under Investment Property, Kansas City, Kansas City Real Estate

Investment Property Inventory Down

Johnson County, Kansas is where I live. It’s in suburban Kansas City and the investment property inventory possibilities from the multi-family housing stock is down right now.  There has been significant competition in the bids for the “good” properties. I’ve said it before and I’m saying it again.  “The worm has turned.”

It should be noted, however, that I still notice a significant difference in the movement of investment property on the Kansas side versus the Missouri side of the state line.  Missouri investment property candidates are selling, but at a much slower pace.

I only write all this to let you know that other investors are back in the Kansas City market.  I noticed this pick up in about mid 2013 and it’s steadily built.  No boom, mind you.  And I consider that good.  At least for our market.

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Filed under Kansas City Real Estate, Real Estate Investing