I've been living in Lees Summit, MO for a little over a year now and have just recently been studying REI. I'm wondering if any seasoned investors around the South KC area have any input about neighborhood ratings and where they feel is the best place to invest.
My business partner and I have narrowed down our niche to Multifamily. The ideal goal is to house hack a fourplex to get our feet wet, while looking for a value-add apartment complex where we can really get the ball rolling and scale.
From word of mouth and research that I have done of South Kansas City, here are my ratings of the area. Please share your thoughts on these rankings as I am new and trying to get a gauge of the best market to dig into for Multifamily investing.
A) Overland Park (A+), Leawood (A), Lees Summit (A-), Blue Springs (A-), Shawnee (A-), Prairie Village (A-), Olathe (A-)
These areas are white collar and safe. The nearby school ratings look good (above 7) on Zillow. The AreaVibes livability rating is above 80. These areas are well developed and offer many amenities.
B) Raymore (B+), Pleasant Hill (B), Harrisonville (B)
These areas are safe, possibly more blue collar. School ratings look good as well. AreaVibes livability is in the upper 70's, lower 80's. Lesser amenities than the A areas above.
C) Belton (C+), Mission (C+), Raytown (C), Grandview (C-)
These areas have more crime with lower school ratings. AreaVibes livability is in the lower 70s and 60s. I think these areas are lower because they either have more crime, lesser schools, or less amenities.
My thinking right now is to house hack in an A. We'll be able to gain experience, it is somewhere that I will feel safe, and has a lot of amenities, but may have to sacrifice cash flow. Then once we gain more experience, move to apartment complexes in areas that produce more cashflow.
So to summarize, My ultimate question to area RE Investors is what area or letter grade have you found offers the best bang for your buck in South KC for Multifamily? Also, what area of the city have you found the most success in?
Thanks for taking the time to read this!
Hey @Brendyn Dabrowski I think you are on the right track for your list. I would just be weary of over generalizing the areas. For example: Most of Overland Park is in an A to A+ neighborhood for sure, but there are definitely some B areas. The same concept applies for Olathe. Most of the city is an A area but there are definitely B and C areas in Olathe.
Prairie Village is probably the trendiest spot for the average homeowner to buy right now, so I'd likely bump that rating up. One of my investor clients will only buy in PV right now.
Also, in my personal opinion, I think Mission, KS is one of the most undervalued areas in Johnson County. I would rate it much higher than a C+. I think it's an easy B area on it's way to an A. If you can find a good property there, I would seriously consider it. My business partner and I recently lost out on a duplex there and we're still kicking ourselves for not offering more for it.
You also may consider adding Roeland Park, KS to your list. It's in the same ballpark as Mission, KS. Seeing quite a bit of rejuvenation. Plus with the surrounding cities being so popular (Prairie Village, Fairway, Westwood, OP) and the shortage of inventory on the market these 2 areas are getting a lot of the spillover for renters and home buyers.
I can't speak too much on the Missouri side as I mostly focus on Johnson County, KS, but I hope that helps.
Feel free to reach out if you have any specific questions!
Thanks for the helpful information @Nick Bianco ! I will definitely start looking into those areas you mentioned closer.
Great advice @Nick Bianco . I agree that nearly anything in Johnson County is a B or better, with most being an A or better area. But there are a few run down areas. But some of them are experiencing some gentrification and new growth around them (which is only a matter of time before they catch on). The schools are strong anywhere in JoCo.
Rentals in Johnson County are a great investment. @Brendyn Dabrowski my one bit of caution would be to not get too far west or south and you should have a great investment for the long term. I dont' know much about south KC on the MO side. I know between the Plaza and 80th is strong as long as you stay near State Line. Then it gets dodgy between 80th and Bannister. Then it picks up again south of 435 along State Line.
Be cautious here. The practice of rating neighborhoods is called RED LINING and a licensed agent/broker is forbidden to do so.
Be sure to limit your publication of such information.
But for those of us who aren't agents, rate away!!
Or go to the local REIA meeting in Overland Park and talk face to face, no internet paper trail - people can be honest with you when talking in person. (they meet tonight)
@Brendyn Dabrowski I like and agree with your local area ratings! Fun times!
@Brendyn Dabrowski I see your logic but if you really want to get real world experience, you might want to consider investing in the property classes and area that you will invest in after this first deal. You may not learn much from an A class property because it won't reflect the kinds if issues that you might experience with B or C class properties. So your experience might not teach you anything, and worse yet, give you a false expectation. If your goal is to get experience an learn from it, it might make sense to start with an property that will expose you to more potential problems while you are at lease living there and can manage them closely.
@Mike D'Arrigo Appreciate the advice! That makes a lot of sense. I will definitely use that approach when looking for my first deal.
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