All Forum Posts by: Chris Dawson

@Jami Morton, I'm going to summarize a lot of the comments already made and maybe add a few more of my own.

• TK is designed for Cash Flow, not appreciation.  You should not be looking to buy from a TK company if appreciation is one of your top investment goals.
• TK is not a bad thing.  It is simply a business model wherein the end buyer is paying a premium for a cash flowing property in exchanging for having to do little to no research or hands on activities.
• Properties that appreciate are much more sensitive to location than properties that just cash flow. 
• Cash flow properties are easy to break down into simple numbers with relatively high accuracy.  By this I mean you can figure out your cash flow based on rents, acquisition costs, and monthly expenses.  There is a little bit of estimation and guess work for figuring out vacancy rates and maintenance rates, but otherwise these numbers are pretty solid.
• Appreciation properties are way more complicated to break down the numbers because there are so many unknowns that can affect the property's ability to appreciate.  Location, local economy, national economy, politics, weather, and so on.  It takes a lot more research to find good appreciating properties than it does to find good cash flowing properties.
• There is a price point that you have to overcome before you can expect the property to appreciate.  This is different for every market.  In Kansas City, its not a hard number, but it is close to $100k.  Basically, you have to be buying in an area that is NOT predominately rentals if you want your property to appreciate.
• If you want appreciation, get yourself a professional, local team.  Most county assessors are now available on line and most are free (at least in KC), but you will spend  a tremendous amount of time trying to manipulate the data into usable information that will help you find good deals.  Find a good, investor friendly real estate agent who will be able to provide you with endless amounts of usable data in easy to understand graphs, charts and spreadsheets.  For example, check out one of my blog pages at  http://arrowrealtynetwork.com/2015/11/kansas-city-... The chart, the video,  and the PDFs that I provide on this page have invaluable information about each area of Kansas City.  All of this info is provided to us agents from our local real estate board.  Any agent worth his/her weight can provide you with this information, so take advantage of it!
• Appreciation spikes (both positive and negative) are much smaller in Kansas City and other Midwestern cities than say on the east or west coasts.  If pure appreciation is your investment goal, than Kansas City would not be a good market for you.  However, it sounds like you just want to have the piece of mind that if you need to sell your property, that you would be able to sell it and at least break even, if not make a little profit.  If this is the case, than KC is definitely a good fit for you.  

I hope this helps you with your decision.  

I like it and I too would want to know where the data came from to support the graph.

@Tim B., I am a real estate broker in Kansas City who works exclusively with investors.  My company offers complete service for investors, including education and mentoring.  Drop me a line.  I'd be happy to help you get started.

Also, make sure you go to at least one of the MAREI meetings that @Kim Tucker mentioned above.  It is the best investment club in Kansas City.

@Sarah Holy I need more details.  Price range?  Location (good, bad, average)?  What do you plan to do with it (flip, rent, wholesale)?

I've got lots of properties, but I need more information from you so I can send you what you actually want to see.

@Jenny Pennock, a good investor friendly agent can use the MLS to pull a lot of this info for you. They won't work for free (or at least not for long), so be sure to offer to pay them for their time; especially if you aren't going to use an agent to purchase/sell your investments.

@Corey Knight,  MAREI and KCIG.org are the 2 best ones in Kansas City.  They both meet once a month in the evenings.  Lots to learn from both of them.

@Cliff Harrison it is always great to hear success stories like yours; especially local, Kansas City stories.  Let me know if you ever need help finding properties or managing your properties.

@David Tipton welcome to PB. You have come to the right place to learn about REI. Feel free to contact me if you ever decide to invest in the Kansas City area.

@Account Closed stated, Google Adwords are probably the best bang for your buck.

If this all sounds too technical, you need to do a google search for a company that will do this for you.

@Steve Christensen, wow, lots of questions here!  I'm not a cpa or a tax lawyer so I can't answer all of these questions, but I will address a few of them.

First of all, if you are a licensed real estate agent, you should have all of your commissioned income going to a separate LLC. You need to instruct your broker to write your commission checks to your LLC, not to you. This LLC should be completely separate from everything else.

Your other questions are more difficult to answer as really we are talking about different ways to skin a cat.  They will all work.  They all have pros and cons.  When I set up my companies, I talked to 2 different lawyers (one tax and one real estate) and to 2 different CPAs and I got 4 different answers which really made me mad!

What I can tell you for sure is what I know from my own experience.

Do not incorporate any of your companies. I was instructed to incorporate my real estate company and file as an S corp. Complete waste of money as you can form an LLC and file it as an S corp and receive the same tax advantages without paying the extra costs involved with doing tax returns for a corporation.

Do separate out all of your different money making activities - rental properties in one entity, flips in another, and so on. The question is should you form separate LLCs or should you do a series LLC. I did separate LLCs for my companies and I wish I would have done Series only for the sake of saving money when it comes time to do your taxes.

As for the Land Trust, I don't have any experience with this.  I can tell you that if you plan on using financing to purchase your properties, it will be difficult to use your land trust as the buyer, if your land trust doesn't generate any revenue or if it doesn't already have assests.  You could buy in your name (or one of your LLCs) and then switch the title over to your Land Trust, but most banks do not like this and if they find out, they could invoke the Acceleration clause.

Hope this helps.