Real Estate Agent · Member since 2018 · 90 posts · 25 votes
How is the KC market looking? What are investors thinking of this area long term? I live in OR and have looked at this market before and it looks like it has had positive cash flowing rental properties at low sales prices, and I'm curious if those who are investing there already are bullish on this market moving forward.
I'm only in MF-my claim to fame is that I've never bought a SFH or gotten a residential loan. I've actually purchased several SFH to tear down and build MF but I'm still keeping my claim!
I usually tell other investors looking out of state to start with a duplex over a SFH. Lots of duplexes in KC. However, always exceptions to this and plenty of people do well with SFH, just not really my thing. I think a duplex produces more income that an SFH for marginally more capex and hassle.
@Sean Ade the Kansas City market has been exceptionally strong for several years. A look at the data on the Board of Realtors shows that
1. Median sales price is up 5.8% in February YOY 2. Pending sales are up 27% 3. There are only 1.7 months of supply of inventory.
So far the market has remained very hot in spite of the corornavirus pandemic. The next couple of weeks will give a more clear picture but at this point in time we're not seeing anything significant. We've been active in Kansas City for several years. Let me know if I can help
@Mike D'Arrigo thank you I appreciate the response! Looks like there is a steady future ahead for KC rentals. I'm interested in what the May reports show since April will give us the first full month of experiencing the pandemic.
I'm bullish on KC, closing on a property in a couple days, with another under contract. Midwest cities tend to be more insulated during uncertain economic times (obviously can vary city-to-city). You won't see the appreciation of other coastal cities, but fundamentals are good and cash-flow isn't too difficult to find.
@Sean Ade the market report for March 2020 provided by the Kansas City Regional Association of Realtors (KCRAR) just came out yesterday. The stats for the greater kansas city metropolitan area are the following:
1. Closed sales were up 3.2% YOY change
2. Median sales price was $208,500, up 6.9% from March 2019
3. Inventory was 4,381 last month which is down 22.7% YOY change
4. Average Days on Market (DOM) was 43, up 17.3% (Increase is negative)
The stats shown above are for existing homes on the market, not new construction. The effects of COVID-19 may be leading to a temporary slowdown in new inventory; a direct correlation has not been proved yet. We are likely to see this impact the housing market in the coming months. If anything, this will be a minor hiccup in real estate industry that may move us more toward market equilibrium. Many professionals are speculating that we may see an influx in available properties when rona has been alleviated and is no longer an ongoing issue.
I personally haven't started investing in real estate yet; my main focus has been on getting through school and helping my clients acquire income producing properties. Some may say it's counterintuitive to help investors while not currently being an investor myself. I mainly focus on the number and what actually works. Despite not being an investor yet, I understand what is needed to analyze and acquire a property. I have a spreadsheet that I use with my clients that gives an in-depth analysis of any property. My financial metrics include CoC for the first year, IRR, and a discounted cash flow analysis to arrive at the NPV of an investment. Some investors overlook the disposition of a property therefore only focusing on the initial/first year returns. I have spent the last 4 years learning about real estate and finance through books, a couple mentors, and school. I would be happy to send over the rental property analysis spreadsheet that I use. Talk with you soon!
@Nathan Roberts If you don't mind I'd definitely want to check out your property analysis spreadsheet. I've used my own and played around with David Toupins spreadsheet which is really helpful. It sounds like you have a deep understanding of the market and have been building your skillset up for a while now. What is your plan for your first investment? I went the househacking route and am happy to share my experience with you if that is your plan too. Would definitely recommend that as a starting point.
@Nathan Brooks thank you! Where do you see the KC marketing heading over the next 6-12 months? Also- what are you doing now during this pandemic to move the needle in your business? Are you actively buying right now for yourself?
Most of my conversations with more experienced investors who've been doing this longer than me all indicate the best deals are still about 8-12 months away. What is your take on that?
How is the KC market looking? What are investors thinking of this area long term? I live in OR and have looked at this market before and it looks like it has had positive cash flowing rental properties at low sales prices, and I'm curious if those who are investing there already are bullish on this market moving forward.
Last I checked that place was flooded with investors. Many have started looking elsewhere in the Midwest for other cities. Such as Cleveland or Toledo in Ohio where the prices are low but so is competition.
How is the KC market looking? What are investors thinking of this area long term? I live in OR and have looked at this market before and it looks like it has had positive cash flowing rental properties at low sales prices, and I'm curious if those who are investing there already are bullish on this market moving forward.
@Sean Ade: Sean, sir. I am actively buying, renovating, and selling Kansas city houses right now. Both personally and in my business. I've laid out some big personal and professional goals for 2020, and I'm still going after them like I would in any market -- focused and with intention. We are making adjustments to processes as the COVID-19 environment demands (working with title companies and lenders to figure out virtual signing of closing docs, etc), but overall, Kansas City real estate is still rocking. I can't predict the future, but I can learn from what history tells me, which is, real estate markets are cyclical. We were due for a recession. Seems like we're facing that now, so what's next is recovery. I'm doing everything I can to keep my foot on the gas and keep getting after it because here's the thing: in my opinion, the true wealth-potential of real estate is tapped when it's seen as a long-term investment, and so time is everything. I can wait 8 months for the "best" deal, or I can take advantage of the opportunity in front of me and get something going NOW. I've done the math on long-term returns (which is what myself and my clients are after) and a few months of lesser returns don't impact the overarching wealth-creation benefit of real estate found in appreciation, depreciation, and tenant mortgage pay down over its lifecycle.
@Nathan Brooks I love the mentality! That is awesome and it sounds like you're going to do better than most during this crisis. I totally agree that any investment i make is for the long term. There is no get rich quick plan in real estate, so I'm confident long term regardless of what happens in the next 6-12 months.
I’m an out of state investor in KC. The fundamentals of the market haven’t changed due to COVID-19. No one has a crystal ball but if you buy right and manage right over time you’ll do well. I have stopped buying in CA (which is more boom and bust) unless I’m getting a really incredible deal to see where prices settle.
In KC I have not purchased post pandemic (really just started) but I’m open to it. I’m actually waiting on a cash out refi to buy again which has been slowed by the bank during this time. The prices fluctuate a lot less in KC. All my tenants have paid for April and my properies are cash flowing well. I’m a big fan of the KC market - now and in the future.
@Sean Ade market is still very strong. Leased up two properties last week and entry-level properties/BRRRs are going under contract in 24 hours or less. My company and personally, we are still purchasing and rehabbing. We are being more cautious but we are not being affected like some of the markets on the coast. Happy to discuss more if you want. Feel free to DM me.
I am also out of state and am looking into purchasing my third property in Kansas City right now. I think what I appreciate most about the provider I work with is the affordable housing range that the rentals fall in between. $800-$1100 rents on a 3 bedroom house typically means 1-2 people coming up with the monthly rent payment, which seems very manageable.
Long term, I think it's a really good market; relatively low priced, stable and diversified economy, growing slowly but steadily, etc.
Right now though with all that's going on, I think it's going to be rough sailing for a while. But that's a national thing and it will be worse elsewhere (particularly the coasts).
@Chad Stark we are transplants here in Kansas City, MO for the last 3 years. Love the market and stability. Great schools, good cash flow, and a few areas have some great potential for appreciation. Would love to hear more about what area you are investing in.
I have a few properties in North Dallas TX and North Atlanta GA and recently bought one in Kansas City MO. (Btw, don't buy in North Dallas as property taxes will eat your cash flow). My friend bought in Kansas City two years ago and I liked the numbers she was getting. She referred me to her agent and I ended up picking up a 3/2.5 SFR this past November in an area NW of downtown, about a 30 minute commute. Completed reno in Dec but it took 4 months to get a tenant. We signed the lease just as Coronavirus started to get serious.
Property is in an A / B neighborhood with good schools. Bought it for $170K, put in $17k for a full interior / exterior refresh. My property manager comped $1,595 rent but we dropped it to $1,495 to get the traffic. Will be raising rent back to market on renewal (hopefully rent prices hold post Corona).
Some thoughts: Unlike other states, KS city doesn't use the MLS to post rentals so you will likely need to get a property manager. On a recent check, I saw that population and job growth for KS city is below average when compared to other metros of its size. I probably would not have invested here had I went off that data alone but my friend was getting decent cash flow and her agent seemed knowledgeable so I went for it. If I can find a better deal in the coming year, I'd pick up another one but I'm now looking at Jacksonville, Orlando and Charlotte as well.
Feel free to DM me if you want to connect or speak with my KS city contacts!
I'm only in MF-my claim to fame is that I've never bought a SFH or gotten a residential loan. I've actually purchased several SFH to tear down and build MF but I'm still keeping my claim!
I usually tell other investors looking out of state to start with a duplex over a SFH. Lots of duplexes in KC. However, always exceptions to this and plenty of people do well with SFH, just not really my thing. I think a duplex produces more income that an SFH for marginally more capex and hassle.