All Forum Posts by: Kevin Trumbull

Welcome aboard @Victoria Frost, you'll find BP to be a great place to learn and network. 

Hi @Jeffery Cass. Welcome to BP. To get an idea of vacancy rates call a few property managers in the area. Knowing this information is very important in your analysis. 

Anybody use them yet? 

Looking for off-market distressed SFR in Kansas City, MO for buy and hold. Good neighborhoods, decent schools, 3/2 about 1300 square feet, ARV $100K+.

Welcome aboard

@Abram Ylitalo

@Jay Hinrichs that is a very interesting perspective I didn't even think about, thank you for bringing it up.  I'll have to keep that in mind down the road if either a) it is taking an unusual amount of time to find a tenant, or b) nobody wants to stay more than a year.

Suffice to say that I've since added some square footage parameters around the Criteria section of my business plan. :)

The other part where the square footage was an issue was insurance, because much of that (specially Replacement Cost) is based on square footage.  I was able to find some good coverage at a reasonable premium, but those first few calls to insurance agents were a bit of a shock.

@Corby Goade Interesting idea, renovations should be done this week though. :)

@Account Closed Thanks for the input Joey, I have mixed feelings on it too. :)  I've actually learned quite a bit since I put this property under contract, and knowing what I know now I probably wouldn't purchase this property again, but at this point assuming all goes well with inspections and appraisals, I think I'll see this one through and use it as an income-producing education lesson.

Hey @Alexander A., yes 6/3 is a little unusual.  I forgot to mention I have spoken with a few PMs, and although they said you'd see diminishing returns on any number of beds over 4, they didn't seem concerned about being able to rent it out.  I have concerns about the type of tenant too though.

When I first selected the property, I was thinking that 6/3 would help improve my exit strategy as I figured it would be easier to sell a big 6/3 to a retail buyer because retail buyers generally want bigger houses.

I'd like to get people's opinion on this turnkey SFH that I have under contract in the Kansas City, MO area. The property is still under renovation, and I have not seen any pictures yet(just what's on Google Maps from 2012). This is my first investment property purchase.

Location: Sugar Creek (right on the border of Independence, close to the intersection of highway 24 and Sterling Ave), neighborhood rated B+, low/no crime

Property: Built 1917, 6 bedroom 3 bath, 2 story, 2,200 square feet, 2 car attached garage

Planned Renovation: New tile flooring in kitchen and baths, new countertops, new carpet throughout, appliances, new light fixtures, interior paint, exterior pain, new water heater.  All mechanicals either serviced or replaced.

Notes: Roof is 1-3 years old, small basement with furnace and water heater, rest is on slab, no nob and tube.

Numbers

• Purchase price: $84,000
• Projected Rent: $975/mo

Expenses

• Loan (20% conventional 30 year): $361/mo
• Taxes: $82/mo
• Insurance: $58/mo
• PM: $88/mo (9%)
• Vacancy: $78/mo (8%)
• Maintenance & CapEx: $98/mo (10%)

Cashflow Estimates

• Actual: $211/mo
• 50% Rule: $127/mo
• CoC Based on Actual: 12.56%

I'd like to get your thoughts and opinions on this.  My biggest concerns are the size of the property (more property to damage, more to replace on turnover), and the age of the property.  I will be getting a 3rd party home inspection and a sewer line inspection.

Seems a little spendy for the area, I think you could do better with your budget, as others had suggested, and sounds like you've realized.