All Forum Posts by: William Robison

@Zach Hall  Similar as previously mentioned, it depends upon your needs.  I spent several years at ReMax and opened my own brokerage a decade ago.  I never looked back.  I think there are many great brokerages around, but it largely depends upon your focus.  It appears that you are interested in investment real estate, which I would suggest that you find a brokerage that is friendly to the same, and even more so, one that has a broker that invests, or at least works with investors extensively.  

Congrats on establishing a career goal in real estate while still in school.  You are steps ahead.  Are you looking for a "job" with a paycheck, or the more traditional commission only type of path?

Are you looking for title insurance or a title search?  I think you will be very challenged to find title insurance on a property that didnt have a warranty deed sale.  I have bought over 100 at the Kansas City sales over the last several years.  We obtain a title report and when we finance the property later, we obtain a title insurance policy as mandated by the lender. 

Hello Pablo.  I am a bit biased in opinion, but I have partners that have experience in the area that you identified.  I am born and raised in KC.  Ive spent the last 16 years in real estate here.  During the downturn, I was a foreclosure agent, and most of my work was in areas similar to what you have mentioned.  For the last 6 years, I have developed a company that helps out of state investors with A and B class properties in the suburbs of KC.  My goal is not to persuade you in any direction, but rather provide you with a bit of education about the market area, whether that is KC, or another area.  East of Hwy 71 is initially an attractive area because of price point and the allure of higher cap rates.  However, the amount of risk taken on by such properties typically doesnt ultimately yield such returns as expected.  Property risk, lack of appreciation, crime risks, lack of appeal, all lead to investments that need far more input from the owner than a more traditional investment area.  I wrote an e-book a couple of years ago that helped investors understand how to review a market area and analyze those risks.  Our company GM, just sold a dozen and a half of these properties, that he was initially drawn toward because of returns, but finally escaped because of a lack of the same.  Hope that helps.  Consider all elements of the investment before diving in.

Is BRRRR still alive? Yes. That is not my contention. If you are willing to scrap your own off market leads, they can be found.

My larger question is, can you find a BRRRR, in the open market, in an A/B class area?

BRRRR is a wonderful buy and hold strategy. We get the question daily, and by all intention, we would love to find BRRRR opportunities everyday for our clients and ourselves. But, in reality, in Kansas City, BRRRR is (essentially) impossible.

Here is why?  Inventory from the collapse is way down.  Foreclosures are substantially lower.  Distressed sellers in a good economy are quite uncommon.  AND, buyers are on the sharp rise.  A large percentage of this increase is the so called Wall Street investor market.  Large funds that are sweeping markets across the nation, buying investment real estate by the thousands.  Individual investors are also on the increase.  Basic economics shows that a decrease in supply and an increase in demand will change markets.  The change is a shrinkage of the margins available.  

As this economic compression occurs, the ability to capture 20% discount to REAL ARV shrinks. (Could an agent convince you of a overinflated ARV, sure, not the argument here). Wall street is willing to buy at retail currently. They want inventory and are betting on appreciation. They also have access to 2% foreign investment cash, so their cap rate requirements are easier to hit. This compression, from more demand, less supply, shrinks the available equity that could be earned in a deal.

When the market "softens", will it be back.  I contend doubtful.  There are still going to be more investors in the marketplace.  Wall Street will still be in the marketplace, likely.  And, the next recession/slow down/correction, is far less likely to be one based upon real estate.  

Regarding market class. C & D market areas, and those that sellers call B markets that are really C markets, will still have less demand, and the potential for a BRRRR. But, should an investor buy that? (Ask me for a copy of my e-book on this)

BUT, investments in long term buy and hold real estate, with cash flow, debt reducing equity creation, and appreciation is STILL a very good business model, even without BRRRR. Dollar cost averaging is still in play. Someone else paying for your retirement can never be beat. Avoiding the influx of chaos on the stock market. Securing assets that are less liquid, and therefore, less impacted by a recession is another great reason. Invest today and invest often for your future.

So, back to the conversation, will BRRRR be back in the A/B class markets?

We personally use them for a couple of our entities.  I would visit with an advisor as they have several options available for services.  If you will use them for a lot, Platinum is a good choice.  Its very comprehensive.  Email me directly and I can give you a referral to a good contact.

https://andersonadvisors.com/?gclid=EAIaIQobChMI2ayKpdzu5AIVCsNkCh38-gLwEAAYASAAEgJ_uvD_BwE

Anderson Legal Advisors.  Work mostly with real estate investors in most states, with focused services.

I highly agree that a trip to the market is a great idea. We are providers of hybrid turnkey property options. But having a very clear understand of the market and the market that your potential provider actually serves, rather than what they state that they serve will be the difference between success and challenge. Identifying the current state of the market and your cap rate vs IRR goals will be another critical factor.

I agree that the TK model in KC has struggled substantially over the years.  A few providers got into the business, but most fizzled and others need to.  A hybrid TK approach will offer more clarity into the investment and allow far less premium charge, which makes an investment in the current climate actually sustainable. 

There are several local meetup groups that would provide you with a great variety of investors to connect with.  

Kansas City is a relatively large market, and property management services can be relatively segmented as well. With that said, it is best to understand your property class, market area and property type for your model to best find a suitable PM firm to assist you. For example, my firm manages A & B class, suburban MO side, SFR and small MFH properties. Other companies specialize in others, but any company that does all, is not a recommendation. A company with a product designed for everyone, has a product for no one. All the best building your team.