All Forum Posts by: Laura Williams

@Scott H. Everyone I know was really scared on their first rental. But once you get one place rented you’ll see it isn’t that big of a deal. If you get a good property manager you won’t even ever have to deal with the tenants. And knock on wood my tenants have been the least of my issues when it comes to investing. Bad Contractors, handymen, PMs have caused me 10x the headaches of any of my tenants. And the only real nightmare tenant I had came from a PM who put them in without doing ANY background check. And the other nightmare tenant was a ‘friend’ that I put in there myself. If you screen properly ...good credit, job, criminal background etc then most of the time you won’t have issues.

@Pete Meadowssmith  My recommendation is to get ahold of your tenant in this property and ask them about your repairs...ask them directly what work the property mngt has done and about the sewer problem. And if they have photos ask them to email that to you. That should tell you what you need to know about these repairs being legit or not. Unfortunately it wouldn't really surprise me it they're being shady.  Some of the PMs I've met here are too dishonest &/or inept to even flip burgers at McDonalds. 

@Brian Orr So my ideas after reading your post. Don't ask for a repair list...it always leads to spending money. I might tell them you have a plumber/electrician coming and ask them if they have any issues with plumbing or electrical that need addressed. In my opinion those are safety issues that need to be fixed but the rest they can deal with lol. 

I wouldn't separate the utilities but I would try to save some water cost by adding a hot water circulating pump to the hot water heater...that basically makes it so when they turn on the hot water it's instantly hot instead of having to wait a minute for it to get hot....another benefit of the hot water circulating pump is that it helps prevent pipes from freezing in the winter, turn off the outside spigot so people can't steal water, have a plumber go through the 4 plex and look for leaks and replace any toilet flaps...replace any toilets that are water hogs. I would keep the dumpster ...it sounds like you have lower end tenants and my experience is they will not be neat/clean in putting the trash in the bins..in my case lead to getting violations from the city...a dumpster is much better in my opinion for multifamily but it might not hurt to shop around and see if you could get a better deal. I would also add building wifi ...I just did that and tenants loved it..especially if they are poor and can't afford the luxury...Cost $60/month and they can all get on and enjoy unlimited high speed. Then after doing that & adding the wifi I would raise the current tenants rent by a small amount ..maybe $25-35 and try to keep them....if/when they move out you'll have a turnover cost /loss of rents/rental leasing fees etc etc and just a paint and cleaning (especially if they've been there a while) is going to be expensive..So I would try hard to keep the current tenants especially if they are good and they pay on time. But if one does move out then I would start section 8ing that unit & eventually the whole building. I know in one town in Missouri you can get $560 a month for a one bedroom or $680 for a 2 bedroom ...which I would guess is probably around the same where you are? The 4K you were going to spend separating the meters I would spend getting your 4 plex section 8 ready and that would greatly increase your cashflow from what you're making now. 

Oh and another tip I would give you is to not let your property manager pay your water or common area bills for the building. My first property manager in KC his company once didn't pay the gas bill so the whole building didn't have hot water and the other time they didn't pay the water bill so the water got shut off. And they don't just turn those on once you pay..in my case it took several days-week for the utility companies to come out and turn them back on. It was a nightmare. I also had them once pay a gas bill (out of my funds of course) of $400 on a property that didn't even have gas. And this PM is supposedly one of the "good ones" on some of the BP list. Another issue my friend had with a different PM was that his water bill went from about $150/month to $700 a month and they just paid the bill without questioning it and they had a problem with the accounting  software and wasn't sending statements so he had a $700 water bill for 3-4 months they paid before  it was caught. Both these Property Managers were fired but I'm jaded and untrusting now lol 

@Carter J.  I don't have a problem with turnkey and I think in theory it could be nice. The problem I have with it is they usually invest in bad neighborhoods to get those returns on paper to look good. And I've seen that end in disaster for more than one investor @Gordon Starr example of the photo is pretty spot on. Usually with a bad neighborhood there is no appreciation and one thing goes wrong and you're screwed..owe more than the house is worth. And when you're dealing with a really low tenant class you'll have issues you never dreamed possible. Some real life examples from people I know ...burning a garage down to the ground, in a multi-family one guy robbing the other tenants/building/handymen, one guy getting arrested cause he was kicking his girlfriend in the face in the common area of an apartment building, squatters, drugs, stealing copper and electrical first time the house is vacant, not paying rent, evictions, homeless people sleeping in the lobby, smearing poop all over the house when they got evicted, flea infestation, sneaking bad aggressive dogs in...could go on but you get the picture. I've known personally of about 3 investors who walked away from their ghetto turnkeys at about 50% of what they paid and were happy to walk away. And a couple bought from a popular turnkey company on BP that has good reviews. 

I wouldn't discount looking on the MLS in addition to looking at turnkeys. I'd also put alot of time into choosing an area that you feel has potential to appreciate where you also get a decent return. Cash-flow and appreciation don't have to be mutually exclusive. Appreciation is important and your insurance policy if things goes bad and your icing on the cake if things go well. I know a guy who lost tens of thousand from bad property mngt on a 12 plex but then he made hundreds of thousands from the appreciation.

My experience has always been the more I put into something the more I got out and with turnkeys you're trusting someone else's judgement, opinion and expertise on just about everything with your property and most people (not all) I've met and worked with on my own investments have NOT had my best interest at heart  ..they've only had their best interest....which is why I like to be hands on & not blindly trusting people.  Just another opinion :) 

@Anthony Lynch The Oak Park Northwest which I believe is from 39th Street to Linwood and Prospect Ave to Indiana?? So that area is ghetto. I would stay west on the other side of Paseo. Between Paseo and Troost is the area I was telling you was gentrifying (still a little rough) but could be good potential appreciation if done right and west of Troost is very good and all the way to Kansas. If you're looking for a lower price point the blue collar areas like Raytown, Grandview, parts of Independence, North of the River or parts of the Kansas State side seem to do well for investors..school systems become important in these areas so keep an eye on that. Although for appreciation (in my opinion) the areas that are more walkable ...in the midtown city area & possibly NorthEast will do better especially if the Trolley Train comes. 

Oh and for the zillow thing you also have to factor in views as well I forgot to mention. Sometimes if a house is overpriced or has bad photos that effects the saves. Attaching 2 examples. One that is a high end luxury condo that has been on the market for 2 months and still doesn't have a renter and the other is a rental house that already has someone lined up to rent after only 4 days. You can see the difference in views and saves. Generally people here tend to prefer houses to condos and also I've noticed a big drop off in demand on places renting for more than $1400/month..unless it's a big 4/2 or 5/3 kind of thing that the college kids or young adults will go in together and share. So I wouldn't go too high end here for a buy and hold...like a 2 bedroom renting for $1700 even if it's amazing is going to be harder than a 2 bedroom renting for $995 just because most people here won't be able to afford it. 

@Matt K. I've noticed this time of year things start slowing down for the residential homebuyers. Usually spring/summer is the best time for sales as a seller. 85th and Ward Pkwy is a very good area. There is a shortage of turnkey houses for sale in good areas. If you put a tenant in there and it got even close to 1% rule return or even a .8% I'd bet you'd have multiple offers selling it to an investor. 

@Kevin Drouillard Without seeing what your rental listing looks like I would say no/bad photos is a good reason that a place might not get rented quickly. If your places don't look good in the pictures then there's not an incentive for someone to come and see it in person. Also if your property is overpriced? It sounds like your property manager might be a block as well. If they aren't getting back to you they are probably not getting back to the interested tenants either. 

I would make a beautiful rental listing with great photos & description and post it everywhere you can ...facebook...zillow etc and offer a free month rent. Make sure the house is clean and spotless and I even put air fresheners in so they smell good. And maybe do open houses once or twice a week and make sure any interested people are getting replied to quickly & followed up with. If you're out of town you might look into getting a Realtor that doesn't get a penny unless your place gets rented to solve the immediate problem of getting funding.

For long term solution I would guess your property manager might be your problem and I'd consider shopping around for a new PM. Vacancies are like cancer in RE business and should be treated as such. If your PM doesn't take a vacancy seriously then I question their competence for looking out for your best interest. 

@Anthony Lynch I've been investing in KC since 2014. The market is strong right now and the hardest part is finding good deals that fit the investing numbers. I invest in Midtown/Hyde Park/Waldo mostly ..the walkable hipper younger areas and about 90% of my properties get a renter in the first week and not uncommon to get in the first day. And every turnover this year I've raised rents by quite a lot. 

I don't know if you're going to get a 3+ bedroom house for under 100k in a great area. That might be tough. Some tips: After doing this for a few years now my preference is for smaller houses that get high rent. Those big houses can be monsters and expensive when there are turnovers. And usually if a tenant has been there for more than 2 years or has a pet then all the trim needs to be painted and tons of touch up paint etc etc $$$. Small houses are just much easier & cheaper to manage. Another tip I can give you is when you're looking at areas to buy go to Zillow and check out the rentals in that area and check out how many people have that listing saved. I've found that is a good indication of how much in demand that house/area is. My houses that get tons of saves ..50-60-70 saves I know are probably going to rent right away and if a property has been on the market say like a month and only has 2-3 saves or none then it shows that property/area is not that much in demand. I've found this to be pretty accurate. So if you see the rentals in a certain area are not that old and have lots of Zillow saves the most likely that's going to be desirable rental area that you will do well in. 

Another tip is that I would stay away from high end condos/multifamily right now in KC. That's the only kinds of property that I see a softening with currently. I think there's an over development right now in KC of high end condos. I know of an investor who bought a high end apartment complex in Westport in 2015 and he's getting about 10-15% less in rents now than he was in 2015 plus his places used to get rented instantly and now they are sitting. 

If you're looking for appreciation I would check out the area between Troost and Paseo from the 20's-50's. The area used to be crap but the past couple years there's some revitalization & new construction going on and I'm seeing flips happening in these areas. It's still block by block so you'd want to be careful and do your research but might be an area to scratch and sniff if you want to play the appreciation game. 

My favorite flooring is Lifeproof sold at Home Depot. It's wide plank/modern and its vinyl so it should be water proof. It's really quick to install. I haven't had it long enough know how scratch resistant it is but I've gotten so many complements on the floor & people always telling me how nice it is. I like the sterling oak color which goes really beautifully with light grey paint. https://www.homedepot.com/p/LifeProof-Sterling-Oak-8-7-in-x-47-6-in-Luxury-Vinyl-Plank-Flooring-20-06-sq-ft-case-I966106L/300699284

Aaron Smith State Farm has a blanket liability policy for 1 million per property for (up to ) 25 properties for a flat $250 year. PM me if you want my guys number ...their office is based in KC

@Mark S. I'm sorry I don't know that street. I wound up not buying in Memphis or with Mid South even though I did hear really great things about the company. When I researched the areas they sell, I wasn't comfortable especially for only a 1% or slightly more than 1% return. I chose a Mid-west city where I could be in great areas with good schools and revitalization for almost the same 1% return at higher price points. Good luck & hopefully some Memphis locals can help you with areas there :)