I'm looking to buy a value-add property in the Kansas City area and essentially doing the BRRRR method. My thought is to buy a livable home that needs some TLC and maybe doesn't cash flow immediately but if I were to live in it for two years and allow the rent to catch up a little bit with the expenses I could then convert it into a rental and move on to the next one. I currently own 0 properties. This approach would allow for us to save up for the next house while hopefully also building some equity.
I would be holding onto this property long-term and buying in a B neighborhood. I think I was just recently inspired by the interview with @Charles Roberts to not be so frantic about making a deal work and being able to sleep well at night!
I welcome any comments, thoughts, concerns, encouragements, and experiences!
Go for it man! I think you've got to pick an area that has duplexes to fourplexes to make your first house hack on a MF work, that is something folks often overlook. That is awesome to say I want a fourplex, but there needs to actually be a stock of them where you are willing to live. You can burn up your FHA and get a low down payment loan or you can put down 25%, what you decide to do will largely be based on your goals. Figure out where you are willing to live, what the stock is there, your price point, and start shoping for the right thing! Maybe look for cosmetic value add on the first one unless you really want to get dirty on a full reno. If I lived in KC I would totally do this. I would probably do it in a really nice walkable neighborhood and likely pay a bit of a premium since I'd be living there. I invest in KC now and I certainly feel safe in the areas that I invest. However, if it were my own residence I might change up the location a bit. Read set for life if you want motivation to buy a house hack as your first RE investment!
That's a great idea. What area are you looking for? I live here in OP as well and invest across KC. Would love to chat more about your strategy. I think a single family home is good start as that's how I got started but like Lee said getting a 4 plex would allow you to make use of house hacking immediately.
I also think that's a good idea, Sam! (Mostly because I'm doing something very similar and I'm glad I did) I bought a single family residence last year and have been house hacking while renting out the other 2 rooms in the house. It's in a fairly desirable area of KC so I had to pay a little premium for it, but it depends on what your goals are and where you want to live. It doesn't cash flow but I just about hit even each month, while gaining equity and making improvements along the way... which is way better than throwing money into rent!
I also agree with @Lee Ripma that a small multifamily can be even more lucrative since you can gain more in rent, but affordable inventory of 2-4plexes in desirable areas in KC seems to be low right now, which makes it tough to find a deal. (I'm looking for similar properties in KC right now as well for my next investment)
Let me know if you want to chat some time
@Sam Sharpe Hey I plan on doing the same thing! Let me know if you want to meet up and talk. I think it's fun to meet fellow investors around the same level of experience!
I have quite a few friends and clients around Kansas City that use that method and are quite successful.
I have seen a few decent listings land in Lee's Summit as well as in the midtown area that would be great for holding as development is booming right now.
I would love to chat sometime and talk about your vision.
So nice to see so many local KC investors on here. Feel free to stop by the next BP Meetup, May 23rd 7:30pm at the Well in Waldo. See more details on the events page. :-)