All Forum Posts by: Milton Chamberlain

Hi Katie!

First - Does anyone have experience in these locations, or have other suggestions for us to consider?
I am an experienced agent in both residential and small multifamily investments. I am happy to further discuss the entire KC metro market with you, as well as my more Specific market of the 'Northland.'

Second - Should we begin with single family homes, or try multi-family to start? How much should we invest in the first property or, alternatively, how much should we keep in reserves for purchasing other properties?

Unfortunately, my answer is more questions! :) my advice would henge on:
-What are your 'metric' goals? Are you looking for something that will cashflow well, but may not appreciate in value as well? Or vice versa? Add-value properties? or something turnkey? The KC metro is a great playground for investors, bc there are so many effective strategies you can choose with success.

multi or SFR?: Once again, depends on your goals and preferred strategies. Feds have made it tough for investors. I am seeing high 7's with 25% down minimum req for multis, with paying .75-1.5 points. 20% down SFR similar rates.

Third - if y'all are, or know of any investor-friendly agents in these locations that are open to talking with us, we'd love to get a conversation going.
Would love to chat with you to see if I am a good fit to assist you. Please message me if you would like to schedule a talk.

Hi Nay,

Question: good learning materials?

Answer: Bigger pockets book and podcasts are packed with great info for those just starting out. and then these forums are great too.

I live in and service the K.ansas City Metro in MO and KS. Unfortunately, most anything here in the metro that will immediately cash flow well and also have a good CAP rate and COC return is going to be something that requires a rehab. Many of these deals require hard money loans/cash due to property conditions and competition from other investors. But occasionally, you can find an ok one that can be financed on the MLS.

In addition, a rehab deal OOS certainly contains risks and pitfalls for Beginner investors. Unless you have a solid team of realtor, contractor, and lender that you have developed trust with, the endeavor would be difficult to pull off well.

That being said, I don't ever want to be the one to tell you not to try something, but if I were you and I was doing my first deal as a rehab, and my budget needed to be spot on, I would try and do it local so I could be there in person and turn it into a learning experience. Better yet, I would take advantage of the Feds incentivizing owner occupying loans by opening it up to 3 and 4-plexes, and house hack where I live, taking advantage of the low down payment and lower interest rates. But I understand you already have a home, so that may not be possible.

There are 'Turnkey' multis in my market that you could immediately buy and rent out and have ok metrics (cash flow, COC return, CAP rate)

an example of a typical 'turnkey' deal you can find easily in the metro:

1101 - 1103 N Aztec Court, Independence, MO 64056

Available in the metro in a C+ area with a good school district. Just lowered price today by 15k. If you were to buy at listed price of 215k, traditional lender would require 25% down and buying down 1.25 points for a 7.625% rate. (Once again, the feds have made it harder and more expensive for smaller investors)

Cash to close:~$56,000
(seller pays closing costs)
Rental income: $1,600
cash flow: $79 /month

CoC ROI: 1.71%
CAP rate: 6.8%

You could maybe negotiate and get these numbers a bit better, but that's about what I would expect in the 'turnkey' realm

There are much better deals (on paper) available, but you begin to tread into higher crime areas where the tenant pool is not great, and the associated costs of theft and vandalism expenses, and the expense of mitigating theft and crime (security cameras, caging in AC units, providing off street parking) are difficult to manage for a beginning OOS investor.

Or they may require some rehab of some kind to make it rentable.

ALL that being said, if you ever want to connect and learn more about my market, reach out!

Hi! if you google 'Frank Lewis property management Kansas City,' I would give him a call. I generally refer him out to my investors needing mgmt, and I have not heard a bad review of him, only good. He hosts the KC Northland monthly investors meetup

Hi Misael,

I have sold a handful of 100+ year old homes with stone foundations. Water intrusion comes with the territory, but up through the floor is newer for me. I would do the no-brainer basics (check out gutters during the next heavy rain to make sure no excessive dumping due to leaks or clogs) plus then extend down spouts/improve grading...depending on the lay of the land around you, maybe a French drain? But these are all just guesses...If you google 'Bob Quick foundation', he is a great non-biased 3rd party structural engineer in KC who can give you an accurate diagnosis...cheap date too at $200 (last I checked). calling him would be the first thing I do. If you then need some actual work (Bob Quick doesn't do any actual repairs) google 'John Norris foundation repair,' he's a reputable fella who does great foundation work..might be a good resource for you.

Other than that, If I were you, I would clear out the basement and let future tenants know that it is not livable, and build some storage racks so they can still have some use out of it. Maybe reduce rent $ if necessary to get it rented.

There are great tenants willing to overlook 'less than desirable' aspects like water in the basement if the price is right (10-20% cheaper than an equivalent property market rent value), Particularly if it is in a desirable area.

If its just annoying wet ground, I would probably just leave it as is and bandaid as much as I could...If its deep (standing water); I sold an OLD stone foundation victorian WAYYY up North (Where (TRIVIA QUESTION!) that coward assassin of Jesse James was born) that had a weird sewer line issue that was going to cost a fortune to fix and would have heavily involved the cities cooperation, so my seller's solution was two powerful sump pumps that would clear out the standing water (*yech!*) in under a minute. and homeowners just lived with it and used the basement for storage with hanging shelving.

Feel free to reach out to me with any future KCRE related questions

sent you a dm. Happy to connect and talk shop when you are in town

I helped 3 investors get into duplexes in the last year in the KC Metro. Taking advantage of the of the 5% CONV (or 3-3.5% FHA) down is the most simple and logical way to get into real estate investing.

PLUS! around a month ago the 'powers that be' chopped the required 15%-25% down for 3 and 4 unit properties down to 5%! So a 400k 4-plex went from needing 80k down payment to 20k. ALOT more options for house hackers now.

I am available to discuss the various aspects of the KC metro with you anytime. 

If you are interested in KCMO, all of the good deals under 10 years of age will be rare, and will need to be acted upon with CASH and speed through a wholesaler. Google New Western KCMO and one of their reps will gladly put you on their email list. I will PM you the one I get off-market properties from. These prices will be 10-15% less than MLS listed properties. Newer homes in desirable areas will come on the MLS under market value, and you can finance these. but they are rare and go quickly.

Happy to give you a break down of the Kansas City Metro market

1. Sell the home and cut my losses. Lose my 4% interest rate and search for another property. A year ago I could have sold and been debt free. Now I'm not going to get enough to pay it all off.

Yeah...I get it. I am contemplating the same thing with one of my small SFH homes, but also dont want to abandon my 4% rate (which we will probably never see again)> The property has always given us issues due to break ins and vandalism, so my wife wants to sell it, but I desperately want to hold onto it for at least another year or two until rates come down...

I would need to no more financial info to properly give you advice;

-address? price paid/downpayment/insurance/Monthly payment (including taxes and insurance? Approx principal?

KC is very seasonal, so I would suggest waiting until AT LEAST March (you will most likely get 5% more during this more favorable spring market. Plus I expect rates to keep coming down, with 3 planned fed rate cuts in 2024. Once mortgage rates come back down to 6% again, it will be very competitive and sellers will receive a premium for their properties. Right now it is a bit slow, and will be so for the next month or so. Generally starts to pick back up early Spring.

I can then tell you how much you could net and what you could transfer into. MAYBE a 1031 would work for you, and you could get into a 'better' property, but maybe the property isn't the issue?

2. Keep the house but find a better property manager. Renters Warehouse is the manager that came with the house. They have been unsatisfactory but I don't have anything to compare to so I don't know if it's worth the effort to find a new one. Their repair processes take forever and they are horrible with communication. And theres about 10 points of contact so I never know which person I need to talk to to get something done. All information is second or third hand. They don't allow me to be as "hands off" as I'd like to be. Any recommendations in the Kansas City area?

Call Frank and leave him a message. He has a great team. 816-890-9800 Frank Lewis RPM Principles. He has helped out many of my KC investors and they are all satisfied with his service.

3. Keep the house and try to find better vendors/quotes for the repairs. I've always gone with the PM recommendations because I really don't have time to do the research myself. But I've got to believe there are more competitive offers out there. Any recommendations in the Kansas City area?

Where's it at? I have a few connections I could help you out with, depending on where it is at in the metro (N,S,E or W?)

4. Make the needed repairs as quoted, keep the same PM, and hope this bad patch is behind me. I'll be pushing the current limit of my HELOC (only 20k left) which will be bad if more emergencies come my way.

I hear you on this. I had a similar issue with a PM of mine in Columbia MO, where they placed a crap tenant twice in the same home, and I was getting beat up with no-bid repair costs and missed income from vacancy. However, this particular property is in a rougher area, so it comes with the territory. Also my repair costs totals have always been under 5k. so not too steep. If you stick with this property, I would urge trying a different PM. Frank Lewis has a great reputation and leads the Northland investors group.

5. Send previous tenant to collections for back rent and repairs needed. Is this a complicated process? How much will it cost me up front? Will it even work?

Unfortunately I have no primary experience with this. However, I am guessing 'The juice will not be worth the squeeze..." hard to bleed a rock. However, If you know that this tenant has money, it may be worth pursuing. but my guess is they have no money.

Hi Marco, I am a full service realtor in the KC metro. I can help you out. Email me and we can set up a time to discuss more about what you are looking for.

Frank Lewis- 816 890 9800 (business line)

Leave him a message and he should get back to you. He hosts the KC Northland Real estate monthly meetup. stand up guy. I refer most of my KC investors to him, and no complaints yet.

I get it, there is a cost of doing business, and I have paid my fair share of move out repairs, but 9-12k?! I understand the damage was extensive, but *big whistle* that's pretty steep for repairs and refinishing, especially when considering it was not a 'one-off' and has been consistent with all your properties.

Most I have ever paid was around 2k, and while the property was not demo'd, it was banged up pretty good by teens who broke in while it was vacant and threw a party and 'vandalised' it, requiring patches, replaced doors, new carpet, repaired cabinets, repainted walls, etc (this was in Columbia MO)