All Forum Posts by: Chad McLeod

@Matt Allen

I have 4 houses in KC. Prices have definitely gone up but property taxes and insurance are low out there. Just an FYI, rents are pretty low in KC but if you can get a good purchase price you should be good. I only look at the suburbs as KC has a lot of rough areas -- but if you're looking at C+ and B areas I would definitely look at Raytown, a suburb southeast of KC. I just bought a home off the MLS there for $70K and should get at least $850 in rent. I'm going to have to put a little money into it, maybe $3-5K, but that's still a good deal, IMO. You can still easily find homes for well under $90K in Raytown. If you look at Raytown I would try to stick to the east side, east of Raytown Rd. Ideal spot is SE Raytown but prices will of course be more there.

Other areas to consider would be the northern areas like 64118 and 64119, and some pockets of 64116 and 64117.  Those areas will be a little more expensive (a little over but will actually have a little appreciation.  But honestly KC is all about monthly cashflow for me, so I'm not too concerned about appreciation.

I made a purchase through Roofstock a couple months ago.  I would disagree with the others who say it's the same as searching Zillow, Redfin, etc., because each property has a dedicated agent to answer questions, walk you through the process, etc.  Some, but not all of the properties have already had an inspection done.  So if you are satisfied with it you don't have to pay for an inspection.  The one I purchased already had one done but I paid for my own anyway, just to be safe.

I agree about the neighborhood ratings sometimes being off, so definitely research those.  The house I bought had a recent 3-year lease signed so I didn't have to find tenants and had money coming in right away.  The rents were in line with the market rate and the price was very fair (actually appraised for $7K over sales price).

All in all, the Roofstock employees were fine.  The biggest issue is the referrals they give.  Since they've been in business for a while the PMs, insurance agents, etc., that they refer are now overwhelmed with new Roofstock business.  The PM they referred to me told me they went from 350 to 700 units in the last 2 years.  So I would highly recommend thoroughly vetting the referrals or just finding your own.  If you go with their recommendation just know communication may be pretty bad.

All in all it was fine.  It's a little easier than doing it yourself because they do some of the leg work for you, but they are growing absurdly fast and I think they might be a victim of their own success at this point.

Any questions just holler.

@Tanner Marsey

No, the Nigerian prince definitely didn't get any of my money.  I actually work in fraud for a living so I've seen all kinds of scams and different ways people get taken advantage of.  And yes, sometimes it's surprising what people fall for.  But in the end I don't view those people as being dumb or uninformed or think that they were "asking for it."  I view them as being preyed upon.  Way more interested in prosecuting the people perpetrating the crime than I am focusing on any shortcomings of the victim.

I find the victim blaming in here pretty hilarious.  People are being blamed for "greed" because they didn't do their due diligence.  Hmmm... but the actual CRIMINAL who commits FRAUD due to greed, eh, whatever.  Let's just gloss over him and try and put the focus on the people who got swindled.  There's always gonna be guys like him!  What are you gonna do?!  

Not doing enough due diligence makes you ignorant, naive, etc.  You know what it doesn't make you?  A criminal who has to flee the country.  Some of you people need to rethink your priorities.

Thanks for the info, Bill!

Tons of great information in this thread!  Thanks to everyone who has taken the time to post data.  

Everything I see here relates to SFR, but do any of the locals know the appreciation numbers for 2-4U multifamily? I've been looking at Vegas as a new market and I currently see a lot of quads for roughly $400K. That's dirt cheap for where I live, but I'm curious if that's kind of par for the course in Vegas. In doing some research I think some are in rough areas, so that's probably one factor.

Thanks in advance.

Truth be told, it's really hard to get honest answers on questions like this.  People just want to plug the cities they invest and/or work in, so it's hard to know who to trust.  I'm not in sales so I have no dog in the fight.  Here's my .02 as a fellow OOS 

I have SFHs in KC and Cleveland.  Both are solid markets, but I wouldn't call either one great.  KC has job and population growth and a low cost of entry, but the rents are pretty low.  Not OKC or Memphis low, but still pretty low.  Also, while home prices are still fairly low they have definitely gone up, and in my experience rents haven't kept pace.  

Cleveland has higher rents than KC but the property taxes are at least double, and in some cases triple or more that of KC.  The property taxes are crazy out there.  The population has declined there, but for me that's not dire.  There are still roughly 400K people there, numerous colleges, healthcare jobs, etc.  But long story short, the taxes eat into profits so much that I probably won't buy there again.  Also, FWIW I like the West suburbs a lot more than the East.  Parma, Lakewood, etc.  

Last thing I will mention because I think it is HUGELY important to OOS investors -- if you invest in a hot investor market like Cleveland for example, just know going in that things will most likely not go real smoothly for you.  Communication from your team out there will most likely be pretty bad. It's nothing personal, they are just overwhelmed.  So a simple email or voicemail that you think will be responded to quickly could take 3-4 days or more.  If the tenants need something fixed it could take 3 weeks before a vendor even gets out there because they are so backlogged with work orders.  If you're a patient person that will definitely help, but the more important issue is being able to retain tenants when they have to wait a month for their AC to get fixed in the middle of the summer.  At least Cleveland has a lot of 2 and 3-year leases.  And yes, you can switch PMs but you will most likely run into the same issues no matter who you use.  

Anyway, that's my novel.  I'm certainly not saying don't invest OOS because I have and will continue to do so.  But I think it's important to mentally prepare yourself for some of the obstacles you will most likely face.

So far I have 5 SFRs, 4 in KC and 1 in Cleveland.  I would love to get into 3-4 units but those 2 markets seem to have mostly duplexes or apartment buildings, with very few tris or quads.  Since you know Cleveland better than I do please let me know if I'm missing something.

Just my opinion, but I don't think KC is a very good market for multifamily.  There are multifamily properties there, but most seem to be in rough neighborhoods.  The multis in better areas are almost always duplexes (VERY hard to find 3-4 units), and even then there aren't many.  I own 4 SFRs in KC and would love to do multifamily but it just isn't there.

Pretty much what everyone else has said -- if you're out of state like me I wouldn't go below B neighborhoods.  Also, a good PM is crucial.  A lot of them are overwhelmed, but of course they won't tell you that.  

Lastly, property taxes are crazy high out there.  In the areas I look, $300 a month is pretty standard.  Compare that with my KC houses where taxes are around $100 and it's a huge hit.