We’ve been considering investing in Kansas City or Lee’s Summit area. I’ve talked to a few local realtors and done some of my own research. Also have family in the area who have clued us in on the best locations. The 1% rule seems like it’s possible but may be somewhat of a stretch. Anyone invest in this area? Or started investing in it recently? We’re more trying to determine how the market is generally today vs say years ago and what the future potential is in the area. I was told by one realtor that unless we are putting more than 20% down then don’t even bother. Our next step would be to take a trip out there to see some properties first hand. As a CA resident we’ve considered investing out of state and since we have family in Kansas City that was the first market we looked into. Thanks for any help.
Well the realtor who said if you can’t put 20% down is wrong. Their are innovative finance strategies if that’s an obstacle. Lee’s Summit prices have risen substantially since the recession. The Kansas City average price is 260K 5-6 years ago it was 190K. You can still find properties it is harder and more competition. Lee’s Summit has been booming and will continue to grow and mirror the prices in Overland Park/KS side. There are other cities besides Lee’s Summit that would be ideal for you guys too. Still great area to invest a lot of opportunities
@Christina Hall Hi Christina, glad to hear you’re thinking about investing in Kansas City. As far as future potential goes, Kansas City has been a strong rental market for a while now and we’re still seeing lots of potential in some select neighborhoods. The 1% rule isn’t as difficult to attain as you might think in this area. As far as down payments, the other realtor was correct, 20-25% down is typical on investment properties.
@Paul Gimmarro Of course, there are always other options with down payments, loans etc.... but most of the properties I see have at least 20% down.
Thanks all. Actually we are planning to put 20% down. What I meant, unless we plan on putting more than that, or even all cash he didn't think there would be enough profit margin. He thought KS was growing too fast too much of a sellers market (as it is in many markets across the country), he didn't think the cash flow would be there. I run the numbers over an over again and they look decent but when I compare rents from what say my family who live there think, prices on Zillow and Trulia, etc. It's been really hard to get a gauge on whether there would be cash flow if purchased in todays' market. Knowing more about the rental market (has it grown as fast as sales prices?) in KS/Lees, etc I think would help.
@Christina Hall There are a number of different options besides putting 20% as you probably know. However, in a hot market such as KC, sellers are much more likely to take a cash or 20% down conventional offer because in their mind the buyer is more likely to close.
@Colton Howell pls see my comment in thread ... we are putting 20% down. The statement was more than that or all cash. Anyhow if you own any investment properties in that area would be great to get your feedback. Thanks.
@Christina Hall We've been active in Kansas City for several years. It's a good cash flow market if you buy in the right areas. Lee's Summit is good but inventory is pretty slim. Also, it's a higher priced area so the numbers don't always work out. We've done a lot in the Independence, Raytown, South Kansas City and Grandview areas. These are mostly good, B and C working class neighborhoods without a lot of crime. Overall, the economic and demographic trends for KC are very good. It has a growing population, good job growth with a diverse and modern economy which bodes well for the future.
Thank you @Mike D'Arrigo !
@Christina Hall PM me and I will send you some info. Lee's Summit is great but no huge potential for growth there. I would advise you to look at some up and coming areas with lower points of entry and high rent rates. They are within 30 mins of Lee's Summit.