All Forum Posts by: Jin Zhang

I would call many insurance companies or brokers and get the best rate. Not sure if there is a best option in CA right now. 

Steadily is landlord only insurance.  Game changer! Look them up. 

You initiate the process by filing a 3-day Notice. It can take up to three days to serve, then you can file in court after the 3-day period. You'll receive a hearing a couple weeks after filing in court. If you win, the tenant has X days to vacate.

The entire process can be done in less than 30 days. However, there are tactics the tenant can use to cause delays. Fortunately, most of them are unaware or unwilling to fight. In my experience, most tenants will disappear when they receive the court summons because they have no defense. Then you can cancel the court hearing and move on.

@Jin Zhang

I would only measure pros and cons against a goal. So I would rephrase the question as: what are the pros and cons of Kansas City for buy and hold small multifamily when my goal is cash flow or what are the pros and cons of Kansas City if my goal is fix and flip SFH with large margins on each project. I'll still try to answer the question:

Pros of Kansas City for buy and hold small multifamily rentals:  

Hybrid market so you get some cash flow and some appreciation (con if you want only cash flow or only want appreciation) 

Inventory of 2, 4, and 5-50 MF buildings (not true of a lot of markets that only have SFH and very large complexes 100+ units)

Relatively low property taxes, although check for the city and state you are in (e.g. Overland Park, KS vs Kansas City, MO) 

Very landlord friendly, worst case eviction is usually 8 weeks + $500 + lost rent (cannot comment on individual cases and this is not legal advice) 

Large diverse metro area - variety of jobs, companies, people can have a career in KC. Lots of medical in KC - hospitals, medical school, etc. Medical destination with excellent care.

Arts and culture of a large metro and THE BEST football team (plus the Taylor Swift boost!) 

Affordable relative to the rest of the US so great place to work remote or just enjoy a reasonable life without being hugely cost burdened 

Cons: 

A lot of older than 1980s construction (you 100% can be successful with these properties just have more to check during due diligence) 

Need to be mindful of market rents in the area and not overspend on renovations where there is not ROI to do so, you can't usually exceed $2 sf on rental rates and average price per sf is 1.25-1.5 sf (neighborhood, unit type, and finish level specific).

KC is not a boom and bust market, you don’t get the high highs or the low lows. Note this can be pro or a con depending on your strategy. You don’t get CA level appreciation in Kansas City.

Some areas are high crime so need make sure you understand the neighborhood you are investing in, like any city all locations are not equal.

Very car centric city, mass transit is not widely used, people don’t walk, they drive outside of a few very walkable locations in heart of the city. 

Weather - you need to make sure tenants are warm in the winter and cool in the summer. You also have snow removal and salting when you own apartments and it can be pricey. Weather also makes insurance more expensive - wind and hail damage properties. 

Clay soils mean that drainage is really important to prevent foundation issues. Very common to have structural issues caused by soil movement. 

That’s a few to help you understand what I see as pros and cons of small MF buy and hold investing. It is what I personally do and I help clients do. It really can be a great market for real estate investing, depending on your goals! 

@Andrew Syrios

So much appreciate the feedback! I changed Grandview and Raytown to be B-/C+ neighborhoods. They have median household incomes of 52k and 55k respectively. I struggled with how much to get down into the B+, B, B-. I now have B+, B, B-/C+ and C. Those four classes are where the majority of investors will buy rentals. 

From my experience the median household incomes really determine the neighborhood class. In KC I'm using the following splits: 

A 99k+

B+ 75k - 99k

B 56k - 75k

B-/C+ 48k - 56k

C 28k - 48k

D under 28k 

Here is the updated guide by zip codes with the new class of B-/C+ created. 

Guide to Kansas City Zip codes

B+ zips

Blue Springs

64015

64014

Grain Valley

64029

Lee’s Summit

64068

64063

64081

Raymore

64083

Kansas City, MO

64145

64112

64101

Liberty

64158

Northland

64152

64151

64154

64155

Shawnee Mission

66217

66216

66219

66215

66210

Olathe

66026

66061

Prairie Village

66205

Gardner

66030

B zips

Kansas City, MO

64105

64114

64111

Kansas City, MO

64137

64138

64108

64111

64131

64110

Independence:

64055

64056

64057

North Kansas City

64119

Overland Park/Merriam

66202

66203

66204

66214

66212

66214

B - /C+ zips

Gladstone

64118

North Kansas City

64116

64117

Independence:

64052

Raytown

64133

Grandview

64030

Belton

64012

Kansas City, KS

66112

66106

C zips

Historic Northeast:

64124

64123

Kansas City, MO

64129

64130

64109

64132

64134

Independence:

64053

64054

64050

Kansas City, KS

66102

66103

66104

66105

Riverside

64150

D zips

Kansas City, MO

64125

64126

64127

64128

Kansas City, KS

66101

Licensing and financing can be difficult. Keep in mind with this investment strategy you are more so running a business than you are investing in real estate. There's nothing wrong with that, just something to be mindful of.