Kansas City Missouri Criteria Sanity Check

[Ryan Lloyd]

Just starting out investing in the KCMO area and working on coming up with my criteria for real estate purchases in the area. Below is my first stab at things. Would love to know from others in the area if I'm off base with expecting to find deals like this? Are ya'll seeing the 1% rule met for example or purchasing at 70% ARV etc...

Beds/Baths: 2-3 Bedroom

Size: 700-1900 sqft

Cash Flow: >$100 cash flow

1% guideline (not rule) on rents

• Example: $100,000 purchase price
• $100,000 * .1 = $1,000 minimum rent for property

75% guideline (not rule): ARV * .75 = Max offer minus renovation costs

• Example: $100,000 ARV and $20,000 renovation costs
• $100,000 * .75 = $75,000 - $20,000 = $55,000 maximum price

Bonus: Good area near good schools or hospital

Bonus: Extra square footage to add additional bedroom etc… to add value

Bonus: Unfinished basement or other area for opportunity to add value

Preferred Areas Ranked:

1. Kansas City Northland Area
2. Liberty and Lee’s Summit Area
   1. Liberty Area
   2. Lee’s Summit
3. Midtown and Plaza Area
4. Independence, Raytown and Grandview Area
   1. Independence
   2. Raytown and Grandview

[Milton Chamberlain]

Sup Ryan!

I work a lot with investors in the Northland, and I don't think you are off at all. I am based out of the ReeceNichols Liberty office, so I primarily spend my time North of the river, but travel down to the city and southern metro occasionally.

Liberty has gone bonkers lately, and very little inventory. Properties fitting your criteria do pop up, but they often escalate to prices that don't make sense. 

The Northland, specifically the center of the Northland, has good deals pop up occasionally. (Gladstone and the surrounding areas)

Raytown and Independence have deals (that make sense) pop up pretty regularly.

Typically (in my experience) the smaller homes (2 bed 1 bath 700-900 sq ft) in the Independence area the ones that can make sense. You can find good condition turnkeys for <95 there, Even less if you can pay cash and waive inspection rights

Message me if you would like to chat more.