New member from greater Kansas city area

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Originally posted by @Erik Nowacki :

@Skyler Taylor

Welcome to BP.  I can completely relate to your situation.  I too had some nicely appreciated San Diego properties that I sold and exchanged into cash flow properties in Memphis.  I fully realize that the new properties are not going to provide me with much appreciation, but I don't really care, so long as they produce cash flow.

Not that you need any additional validation of your decision to relocate your investments, but here are a couple of points.  While the property tax "subsidy" of prop 13 (not really a subsidy as it only means the government takes a little less of your money...) is nice, you also have to take into consideration that the PRC  (Peoples Republic of California) is one of the most landlord hostile states.  It takes months to get rid of a non-paying tenant, you're often better off bribing the deadbeats to give you back the apartment.  In Memphis, it takes 3 weeks and you only pay $200 or so for the court and attorneys fees.

Another PRC quirk is that the Sargent Shriver act takes a few millions of taxpayer money and gives it to Legal Aid, for the specific purpose of harassing and blackmailing landlords in any case where the tenant shows up in court without a lawyer.

Since cap rates in San Diego are just about even with the interest rates, I figured that we must be close to another market peak.  

Since you got "jumped" for your decision to relocate your capital, I thought I would chime in to let you know that there are those of us on this site who have read the markets, arrived at the same conclusions and taken similar actions.  You're in good company.  Please don't hesitate to float any comments, questions or concerns you might have, this is a great forum.

Erik

 Thanks for your thoughtful reply. I do believe the caprates are low in that market. I made a few mistakes when acquiring the property. The main one was structuring in a 15 yr note. I had a 3.00% interest rate but I would not gain the benefit of the continued devaluation of the currency and inflation along with it killing my cash flow but knocking out my principal.

Again this was part of the learning process and BP along with other real estate investment books helped me understand this. Additionally when I purchased the property I had an HOA holiday for the first 2 years. Once that came due I was negatively cash flowing. I started off doing real estate using a semi bastardized version of Dave Ramsey. I know I know he says pay cash for investment properties but that just wasn't plausible to wait 3 more years to buy a property that's still on the down swing.

After reading the book everyone cites rich dad poor dad ii had a different perspective on how to make debt work for you. BTW just came from Nashville watched my favorite NFL team Titans play. Nashville is great and the downtown reminds me of San Diego when they started building like crazy downtown.

Hello and welcome to BP. I am also in OP and investing here in the metro. I mostly have SFR with a couple duplexes in kcmo and Grandview. Hope to see you around.

I currently live and cash flow in SoCal, but I appreciate the nostalgia from growing up in Johnson County, KS.  I too am on the search in KC for my next acquisition since prices are up in Cali.  One nice thing about SoCal is that I just did a tenant change and bumped the rent 20%.  I was still the cheapest and got flooded with applicants.  You won't get that in the midwest. 

Originally posted by @Thad Miller :

I currently live and cash flow in SoCal, but I appreciate the nostalgia from growing up in Johnson County, KS.  I too am on the search in KC for my next acquisition since prices are up in Cali.  One nice thing about SoCal is that I just did a tenant change and bumped the rent 20%.  I was still the cheapest and got flooded with applicants.  You won't get that in the midwest. 

Glad to hear about your success Thad. I love purchasing property when the rent is below market value. The owner I recently purchased the full duplex from had been charging his tenant $850 for the past 5 years. I had the tenant removed and improved the unit up to my standard. Before I was even done renovating I had it rented for $1450 for a year and a half lease. Right here in the Midwest :)

@Skyler Taylor Glad to see you've expanded beyond your traditional  analytics to come up with different ways to assess property values.  With an ever-changing market, we are real estate professionals need to change along with it.  California and Florida are great places to invest when the market is on the rise, so hopefully you'll consider coming back.  Through forums on BP, I'm sure you can engage with professionals in these markets to assess the feasibility of re-entering.  Good luck!

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