All Forum Posts by: Mitch Rice

If it's near the zoo/swope park and west of 435, it's in a very rough area. The numbers may look good on paper, but be prepared for high turnover, vacancy, and repairs. Experienced local investors can make money there, but unless you have an amazing PM you're probably asking for trouble.

Raytown, east of the zoo, is a much better area.

Finished basements are desirable in Kansas City but it's due to the additional living space, not really because of safety. Most people in KC don't really think about tornados since we've grown up with sirens our whole lives and have probably never even seen a tornado.

In your analysis if the basement is finished, treat it as additional square footage that will likely generate higher rent. If it's unfinished, it's just storage space and likely won't generate additional rent. Depending upon the age of the house, a basement may cause more maintenance issues than a house on a slab.

Mitch

@Cliff Harrison quick question regarding your buy/fix/finance strategy. How long are your lender's seasoning requirements prior to you being able to refinance at appraised value vs. purchase price?

Thanks,

Mitch

Welcome to BP. KC is a great market.

What's the address or MLS #?

Nice work Cliff!  As always, your progress is encouraging. 

@Account Closed

Welcome Joe! BP is a great community and Kansas City is one of the best buy and hold markets in the nation. 

To get you started, most people look for buy/hold properties in Grandview, Raytown, or KCMO outside of the 435 loop. You probably won't get much appreciation, but they cashflow well. For flips, the trendier parts of KCMO near the plaza, midtown, or waldo are good. Or Prairie Village, KS.

Good luck on your search.

Once costs such as vacancy, repairs, and capex are calculated, this property will be negative cashflow. A good rule of thumb is that your expenses will equal about 50% of gross income. The remaining 50% is left to cover debt service (just principal and interest, taxes and insurance are expenses). Whatever is left of the later 50% after debt service is your profit.

@Cliff Harrison

Great job! Your speed of acquisition is impressive. 

@Chad Hotovec welcome! BP is a great community and you'll learn a lot in a very short period of time.

If you're a reader, definitely pickup The Millionaire Real Estate Investor as @Justin Rollheiser suggested. It was written in 2004 so some of the specifics around numbers and finance rates are outdated, but it's an excellent book that goes through the fundamentals of investing.