Kansas City Market Evaluation Using BP Rental Property Tool

13 Replies

Hello BP members.  I am new as of two days ago to BP.   I am in Kansas City and planning on purchasing my first multifamily property.   I have been using BP tools for rental property evaluation but not sure how to fill up all the questions relating to Kansas City market.  If any of you experienced BP members are willing to have coffee and discussed with me your approach (and possible mentor-ship in the future), please contact me!   Look forward hearing from you.   

I'm in Kansas City and know the market well. Let me know what I can do to help :)

Why don't you join us at the next BP meetup on Nov 9th?

@Michelle L. Are these meet ups a monthly thing? I'm trying to move to KS, MO in the following months and would love to attend these meeting.

Thank you everyone for your replies.  I live in Overland Park area.  I mainly have problem with the 3rd page of rental property analysis which mostly relates to Percentages dedicated capEx, property management, etc.  I attended Ian Reeves meeting on Nov 15 (he was on BP but this meeting was not hosted by BP).  

Originally posted by @Michelle L. :

Why don't you join us at the next BP meetup on Nov 9th?

 Sorry missed that meeting.  Are these meetings monthly.  When is the next one?

Originally posted by @Dan Krupa :

@Darius Amani what area of KC? MO or KS? What portion of the calculator?

 Kansas side of the city.   Mostly Rental Property Calculator page 3 where all the percentages need (e.g easy one is 8-10% for property manager).  Thanks!

@Darius Amani - 10% is standard for PM. It will decrease if you have multiple doors but not much. Use 10% as your number initially. Anything less is more money in your pocket. 

Originally posted by @Dan Krupa :

@Darius Amani - 10% is standard for PM. It will decrease if you have multiple doors but not much. Use 10% as your number initially. Anything less is more money in your pocket. 

Thank you.   How about other % in the Rental Property calculator?  

vacancy  5%

Repairs and Maint  5%

CapEx 5%

Annual income growth 2%

Annual PV growth 2%

Annual expenses growth 2%

Sales expenses 5%

Are those reasonable for Kansas City market?

Thank you!

Darius,

I figure in 8% for vacancy, 10% for repairs, and 10% for capex.  I would rather be on the safer side when configuring numbers.  Other factors that would influence you: are you performing the repairs?  What is the age of the property?  What is the rental market like in the areas that you're looking into?  Watch the BP tutorials for these spreadsheets too.  They are helpful for initial guidance. 

Originally posted by @Trista Fenner :

Darius,

I figure in 8% for vacancy, 10% for repairs, and 10% for capex.  I would rather be on the safer side when configuring numbers.  Other factors that would influence you: are you performing the repairs?  What is the age of the property?  What is the rental market like in the areas that you're looking into?  Watch the BP tutorials for these spreadsheets too.  They are helpful for initial guidance. 

 Trista,

Appreciate your input!  They are great points to consider!

Darius

@Darius Amani - I hate to say this but...it depends. If I have just finished rehabbing a property and I know the roof, HVAC, windows, driveway, water heater, plumbing and electrical is all new then the Cap ex is low for me. If the property is older and you know any of those major systems needs replacing sooner than later - I would go with 7 to 10%. 

Vacancy - I always calculate it so at least one month of rent is stashed away over 12 months. Typically 6 or 7%. 

Repairs and maintenance - again, it depends. Are you doing the work? What is the condition of the property? Are you tenants handy or have you written into the rental contract that repairs under $25 need to be completed by your tenants? 5 to 10% is good. 

Growth of 2% is responsible.

If you are buying you have a $1500 to $2000 in closing cost. If it is a long-term hold I wouldn't factor in sales expense yet or make it minimal. I usually factor in my sales expense over five years in case I do decide to sell early/1031.

Originally posted by @Dan Krupa :

@Darius Amani - I hate to say this but...it depends. If I have just finished rehabbing a property and I know the roof, HVAC, windows, driveway, water heater, plumbing and electrical is all new then the Cap ex is low for me. If the property is older and you know any of those major systems needs replacing sooner than later - I would go with 7 to 10%. 

Vacancy - I always calculate it so at least one month of rent is stashed away over 12 months. Typically 6 or 7%. 

Repairs and maintenance - again, it depends. Are you doing the work? What is the condition of the property? Are you tenants handy or have you written into the rental contract that repairs under $25 need to be completed by your tenants? 5 to 10% is good. 

Growth of 2% is responsible.

If you are buying you have a $1500 to $2000 in closing cost. If it is a long-term hold I wouldn't factor in sales expense yet or make it minimal. I usually factor in my sales expense over five years in case I do decide to sell early/1031.

Thank you Dan.  Appreciate the input!   

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