All Forum Posts by: Lee Ripma

@Michael Hunt

I like to differentiate between BRRRR and stabilized value add (I talk about this in depth on my podcast episode BP 373).

If you are doing BRRR then the property is completely distressed - it will either be vacant or have tenants who will tolerate terrible conditions. So you'll tent to clear it out, rehab the whole thing. If you're doing a 2-4 unit it is much easier to just have it vacant so you can fix all the plumbing, HVAC, wiring, etc. Then you'll do all the cosmetics at the same time - this saves both time and money. If it is a large building you might do it "stack by stack" stacks of four. Just depends on the building layout but let's say it was a 24 unit made up of 8 buildings (common in KC) you would think of it of 6 stacks of 4 and see how many stacks of 4 you could do at once. You could also go building by building. But if the building is truly distressed enough for BRRRR then you'll probably be doing the whole project at once.

However, if you are doing stabilized value-add you'll do one unit at a time. This works where you have upside of say 200-400/mo with renovations but the building is not distressed. You can easily vacate the tenants a few at a time. 

I hope that helps! 

Hi James - 

People are successful real estate investors in both the suburbs and the core metro areas. So I think the question is really - what do you want? It sounds like you are interested in purchasing multifamilies with larger units in the suburbs that are B class. Great strategy! I can tell you that this works well in B class suburbs of Kansas City - Overland Park, Blue Springs, Lee's Summit and C areas - Independence, Raytown, Belton, Grandview. I say go for it! One mistake people make is thinking that large unit MF will be available in their chosen submarket. I can tell you for the submarkets I just mentioned 2-4 units and/or packages of 2-4 units are common but larger apartments are not always available. Suburban = less dense = less dense housing, in general. 

@Ali Mirabzadeh

I have looked at both markets and invest in KC. KC actually has the highest density of small MF built after 1960 of any affordable market I have analyzed. In Indie if you want "newer" construction you'll need to buy SFH. See numbers pulled today for both markets. Note this is for the entire MSA.

Coming from CA you don't think about year of construction. In the midwest this really matters and one of the things I didn't realize when I started investing out of state. I prefer to buy built after 1980 but will buy after 1960. Prior to 1960s I avoid. 

KC has some great B class submarkets that appreciate well on both rents and on natural market appreciation from what I've seen. See screenshots below taken from ZipFinder for where I would focus for appreciation. KC still won't appreciate like CA but you can't beat it for the tenant's rights and the price points. My favorite B class submarkets for appreciation - Overland Park (KS), and Blue Springs and Lee's Summit, MO. Also some areas of Independence and some areas of KCMO. Some good C class areas as well. It's really just a great market for rental investing. 

@Travis Mullenix - I don't find the info in neighborhood scout is able to help me make decisions on if I would invest in a location. I tried it too. 

@Jon Licht

Love this! I find both cash flow and cap rates in MF to be total BS. Buy good locations at decent prices - the results take care of themselves! 

@Chinmayi Desai

Kia Ora Chinmayi! Love NZ and my whole immediate family is permeant residents there. Have spent much time tramping and enjoying NZ. The US is a great place to invest in RE. I think your largest hurdle will be lending. Are you a US citizen? Hop on the forums and start learning! 

@William Staton

Or you can take 30 seconds to filter by all the zip codes in the US using VestMap.com's ZipFinder

. I personally select B class areas with growth. I would use the attached zip code map as a guide. You can see the criteria on the left. 

 VestMap.com