All Forum Posts by: Ali Boone

How many more hands-off options have you looked into? There are a lot of ways to invest without having to be hands-on. Syndications are a good one, REITs, etc. and then if you want actual property, you can go the turnkey route which isn't 100% hands-off, but it's a heck of a lot more doable when you don't have time to do things yourself. Lots of folks who work full-time jobs and have families go the turnkey route. And by turnkey, either going through a turnkey provider company, or if you're in Minneapolis, I'd imagine there are local cash flow options, so you could just focus on finding a property that's in good turnkey condition so it requires less work. Find a good investor-friendly agent to find you one.

Hey everyone, looking to get some names of property managers you love in Kansas City. This property is in Kansas City, KS, but Kansas City, MO property managers are fine too.

Thanks!

Quote from @Angel Wu:

Quote from @Ali Boone:

You can get the actual property tax amount if you go to the tax assessor's website for that county and plug in the address. All of that is public record.

A CoC of 8% has gotten pretty hard for turnkeys, but it's not undoable. I'm working with turnkeys from a provider on the Illinois side of St. Louis-- all the properties hit the 1% rule (believe it or not) and most of them are at least 8% CoC. You can also try to put your own team together outside of the turnkey providers and try to get rent-ready/turnkey properties that way.

It's not that everyone is suddenly investing for appreciation, but they are having to do a lot more thorough analyses of the other profit centers on a rental property outside of cash flow (the profit centers that actually make people wealthy in REI...cash flow by itself has never been what makes someone filthy rich). Appreciation is a big one, but the biggest one is the hedging against inflation. The more inflation goes crazy, the more profitable a property (with a fixed-rate mortgage) is.

Thanks for your response Ali. Question regarding property tax…. The properties I've been analyzing all currently have very low property taxes (~1200/yr). When I use that property tax amount in my analysis the COC is very high. However my concern is that once the property is sold it can be reassessed either right away or at any point in the future. Once it is reassessed it can go up to 2% of the purchase price as worst case scenario in the market I'm analyzing. As an investor don't I have to account for a worst case scenario which would mean property tax of ~7000/ year? When that happens that would effectively eat up all the earnings and put me in negative cash flow right away. So does this mean investors just buy and hope that that reassessment doesn't happen or isn't that high and when/if it does go up to worst case scenario 2%*purchase price they quickly sell? I've read of other's experiences with this on the forum and some say they've gotten lawyers and professionals to help fight the property tax increases with no success so they are just stuck with negative cash flow properties. Given this type of risk I'm thinking why would anyone invest!? There must me some strategy or way of thinking that I'm missing!!

It's not that abstract. Every state/county assess taxes differently and you can find out exactly what that is (so you aren't guessing). Some change with a sale, so based on the new price like you're mentioning (although I haven't run into a market that does as high as 2%), and some base it on property value. Atlanta and Nashville both do that, whereas Jackson County where Kansas City is does 1.35% of the purchase price, and it's reassessed every 2 years. So find out from either Google or a local professional what the property tax is based off of for the area you're thinking of purchasing in. Then use that number in your CoC. That way you know what you can expect at some point down the road and decide if it fits into your numbers as still being a good deal.

I would focus less on what you "should" do, which I'm assuming is just because you keep hearing people go on about how smart househacking is. It can be, sure, but it isn't the only option and definitely shouldn't deter you from making a smart investment. Sometimes it can cost more to 'live for free', in more ways than just with money. If that duplex will cash flow $400-500/month, I'd say go for it (depending on what the purchase price of the property is, to know how good of a return that is). With interest rates are where they are right now, those cash flow numbers have gotten stupidly hard to hit. Get that property, learn the ropes, househack later when it makes more sense. Don't get yourself in a pickle because you think you need to hack. If it works to do it, great, but if not, don't miss out on good deals in the meantime.

Are you only interested in new construction/build-to-rent properties? Or general turnkeys as well? All the companies you mention are primarily turnkey companies.

Have you asked them for photos of the repairs and they've just not sent them? Or have you not asked and you've been hoping they would've provided it?

Are you set on Atlanta as the market you want to jump into? Only reason I ask is because cash flow there is next to nonexistent now. I'm from Atlanta and most of my properties are there. I hardly hear of anyone buying there anymore because most properties have shifted into appreciation plays.

Close to there is Birmingham, and there's been a lot of cash flow there more recently, but even that cash flow is next to gone (prices have jumped a ton and then the interest rates have blown out whatever was left).

BUT, if you're wanting to put work into something, that will help. I would try to find an investor friendly agent wherever you look, one who's savvy on rehabbing, and see where they can point you.

Do they want value-add properties or rent-ready/turnkey? If they want value-add and are interested in Kansas City, I'm working with a guy who's doing value-add MFRs. They have an 18-plex right now (a 6-plex and 12-plex side-by-side) for $1.75M, and it comes with a vacant lot that can be developed next to it for the value-add. They have smaller stuff as well, one is a value-add 6-plex.

I also have a guy who can do everything- value-add and turnkey- on the Illinois side of St. Louis if that's of any interest. He's about to do a value-add $1.5M shopping center with a TON of value-add potential (the Kansas City ones are a little less value-add). He can do apartments as well.

You can get the actual property tax amount if you go to the tax assessor's website for that county and plug in the address. All of that is public record.

A CoC of 8% has gotten pretty hard for turnkeys, but it's not undoable. I'm working with turnkeys from a provider on the Illinois side of St. Louis-- all the properties hit the 1% rule (believe it or not) and most of them are at least 8% CoC. You can also try to put your own team together outside of the turnkey providers and try to get rent-ready/turnkey properties that way.

It's not that everyone is suddenly investing for appreciation, but they are having to do a lot more thorough analyses of the other profit centers on a rental property outside of cash flow (the profit centers that actually make people wealthy in REI...cash flow by itself has never been what makes someone filthy rich). Appreciation is a big one, but the biggest one is the hedging against inflation. The more inflation goes crazy, the more profitable a property (with a fixed-rate mortgage) is.

Not a silly question, it's a good one. The key is to make sure you're working with a good property manager. If the manager is good, the repairs should be good. If the PM is bad, godspeed to the repairs. And you can always have them send pictures or video of the repairs as well.

Yeah, the tenants will put a maintenance request in to the PM, the PM will let you know (a good one will) either through an automated email or they'll reach out personally and confirm you want them to send someone out, and then they'll let you know the quote. Most repairs get done and then the expense for it is just withheld out of your next month's deposit. If it's a big or expensive repair, they may require you to pay them directly for it.