Category Archives: Uncategorized

Property Management and Investment Properties

Wow.  I just realized I have now been working with investment properties in Kansas City for fifteen years now and before that two years in Tulsa.  In addition, I have been working as a property manager in Kansas City since 2006.  My how time flies.

There have been a lot of changes in my career and the investment property business since 2004 when I returned to Kansas City.  I arrived in boom. Lived through bust.  And now we are (at the end?) in another boom.

Rental property homes are at a premium right now. West coast (and East) are flooding in to KC driving prices higher and higher and returns lower and lower.  I’ve seen this before;

  • Red hot seller’s market
  • Low/Reasonable interest rates
  • 100% loans for anyone with a 620 credit score or above
  • Investor loans with 90, 95 and even 100% LTV
  • Investor loans that include rehab money

Yes, I call those times 2006-2008 in Kansas City.  The bust started in KC when the banks stopped lending in September 2008.  Of course, the coasts experienced the shift much sooner. Still, this is time is a little different;

  • While both time had/have limited seller inventory, this time there is real limited inventory…we just don’t have enough housing units
  • The new-builds happening are WAY ABOVE what most first time home buyers can afford

Does that mean we’ll not have a bust? Or even a slow down here in the Midwest?  Does that mean the buy, rehab and hold is still a great strategy…that keeps getting better?  (Note that link is from 2011…can’t get those returns or prices today.)  Does any of that really matter and the economy will still shift here in the middle of the country?

Look, I still believe wholeheartedly in real estate investing.  Owning income property is a great way to hedge inflation while earning from the 4 Benefits of Real Estate Investing. Yet, timing can matter.  All I’m saying is proceed with caution.  If you are planning on buying and renting property for the next three to four years I’d be super cautious.  If you are planning on owning rental homes for the next seven years or more, I’d say green light.  After all, time is your friend when you own real estate.

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Real Estate: Highest and Best Use in Overland Park

One of the first things a potential real estate agent learns in class is that real estate is about Highest and Best Use.  You can see that happening in Overland Park, Kansas right now in this story in today’s Kansas City Star.

Most people do not like change.  Me?  I love it when our cities become better utilized. Bringing life to communities through proper zoning and use creates a better living experience and uses our resources (land, gas, utilities, infrastructure) in a more economical way. Mixing living quarters with offices and retail allows a building and all its infrastructure to be utilized 24 hours a day, rather than 9 or 10.  An added benefit is that residents don’t necessarily have to get in a car and drive a mile just to get our of their subdivision and then another mile, or two or three, to their destination for a gallon of milk or a quick meal.

Anyone remember downtown Kansas City in the 1970’s and 1980’s and well in to the late 1990’s?  It was a concrete ghost-land after 5:30 pm before apartments and lofts began to trickle in.  Later that trickle became a tsunami.   This is the reality of our cities across America.  And I for one am all for it.

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Working With Real Estate Investors

I have to admit, I’m kind of excited to be putting my “old clothes” on today and teaching about real estate investing.  I love where my life has taken me…  And this his how it all started.

There is just something about helping people secure a “Retirement worth having.” that gets my juices flowing.

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Working With Real Estate Investors

I am holding a class, along with Matt Braswell, titled Working With Real Estate Investors. If you are a real estate agent and you follow along on this blog, feel free to attend.

working with real estate investors

The concept of home ownership and 50 dollars high quality and high resolution studio shoot

Here is the link to find more information and register for Working With Real Estate Investors
November 30th, 2017 1:00 – 2:00 pm in Olathe, Kansas.

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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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1031 Tax Deferred Exchange Explanation

Over on my real estate training blog for real estate agents I did a video on 1031 Tax Deferred Exchanges. Therefore, I thought I would write this very short blog to link to that text if you wanted to take a look. Just hit the highlighted link.

Market Update
Here in Kansas City real estate investment property is stupidly over-priced  in so many cases. We are keeping our eyes out for suitably priced rental property.  However, picking are slim.

My advice? Hoard money.  I may not be the old man on the hill but I’ve been around long enough to know that economies go up and economies go down. We’ll eventually level off and allow prices to get more in line with wages.  In the mean time if you find something you must have, buy it. (So long as the numbers work.)

Otherwise, sit back and stock cash.

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Questions About Kansas City Real Estate Investing

I received an email this morning from a young, would-be real estate investor here in Kansas City.  Rather than talk about it I just thought I would share his well thought out questions and my answers.  My hope is this correspondence will help someone out there as they begin to start their real estate investing journey.

***

 Hello (name hidden),
I wish you luck.  Proceed with caution but calculated risk.  Years are your friend. You have a lot of them.  Save a minimum of 5% of everything you earn, 10% is better.  It will look ridiculous at first and you will be tempted to accelerate the process with too much risk.  Again, time is your friend.
See my comments below.
->
Hi Chris,
I am contacting you today because I am a recent University of Kansas graduate who is looking to learn more about real estate investing and I am particularly interested in the Kansas City market. I happened to stumble upon your website and really enjoyed getting some useful information! I was hoping that you may be able to find some time to answer a few questions?
1) Who would you consider to be the top real estate investors in Kansas City in the last 10 years and why?  I have no idea. I don’t think of it in these terms.  You have to determine your plan and sit down with someone that can help you make a solid plan that is do-able and realistic.
2)What would be the top 3 things that separates the Kansas City market from the rest of the country? Affordability is first.  Affordability is second.  And affordability is third.  We are median.  The west coast looks at our housing prices and rent ratios and it looks like a candy store to them. 
3) What would be a realistic goal for a number of properties to buy within a 5 year time frame on a salary of about $30,000 a year?  So much depends on your strategy and starting capital.  If you tell me your starting capital is zero, we’re going to have to save first.  Now, you can use hard money…be careful.  There is money to be made here but only by the determined and quick-witted. There will be dozens, no hundreds, no thousands of get rich opportunities for those starting with no money.  Choose your advisers carefully.  Very carefully. 
4) What has been the biggest mistake you’ve made in your career so far? Not fully understanding how money works and how time is your best of friends.
 
Listen, I’ve blind copied a man named Ryan on this email.  Should he be willing to respond to you it would behoove you to buy the man a cup of coffee (probably of the 12 oz beer variety).  Ryan bought his first home with me at 21, I believe.  We’ve clashed over the years as to the amount of risk he was taking but he came out on top.  He’s smart and now in his mid-30s and owns over 125 doors.  
 
As I said, he’d be an excellent “investor” for you to get to know if he chooses to answer this email.
 
As for me?  I’d advise someone with limited capital to get a real estate license and learn to sell.  You can be the “middle man” with little to no risk and make a serious living in an honorable and ethical way.  Yes, it is hard.  But so is everything worth doing.
 
I wish you luck on your search.  Now that you are out of college you can begin to learn how life really works.  Nothing is given. It has to be earned.  It can, however, be earned in a way that you’ll be proud you accomplished your goal.  Never set aside ethics. And never, and I mean never, set aside your dream. It can evolve and change and morph.  But don’t quit.  There will be plenty of nay-sayers.  My wife and I like to reflect on them when we are sipping cold drinks in Mexico. 
 
If I can be of any further assistance, let me know.
 
Rock Chalk.
Thank you so much for your time if you have made it this far.  I really hope to hear back from you! Have a great day!

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