All Forum Posts by: Morgan McRae

This is a great thread to follow here. I have a goal to purchase my first rental investment property sometime in 2023. I've been pretty successful at scouting off market SFHs for investment teams in both KC and Topeka. At this point, I'm ready to take on an off-market SFH as a rental property investment.

I'm toying with three markets, trying to find the best fit. That's how I came across this article. I was born and raised in Topeka, so naturally it's appealing to me. I'm comparing the rental investment landscape across Kansas City, St. Louis, and Topeka. Each market obviously its pros or cons, but I'm partial to Topeka since I know the area. 

Would any of the active investors in Topeka be willing to message me regarding areas of town where they've had the most success? I have several ideas from living there, but would be curious if I'm missing something. I don't necessarily care about appreciation of the house, since I plan to hold long term, and utilize the BRRRR method to create some cashflow. Thanks in advance.

Good questions @Caleb Brown. This particular property is in 64117. It is zoned R-6, which I believe permits household living, but not group living. Maybe the back house cannot be rented out as a separate unit. I will have to dig into whether the back structure runs separate utilities. 

@Andrew Syrios

I'm looking at picking up a property in Kansas City, MO for fix & flip. It is not quite a deal at current asking price. There's barely not enough spread for profit. The front house is a 2-1, 950 SF. However, there is an additional standalone 1-1, 450 SF house in the back yard which has been rented successfully within the past couple of years. If this were fixed up to rental condition, it could be pitched as an income generator for retail buyers. 

My question is, how do you go about evaluating the numbers regarding my offer price? How much more does this 1-1 rental add to the value of the entire property, along with the main house, a 2-1? I'm sure there are many ways to consider this, but would love to hear anyone's initial ideas. I think this could be a great deal if the back house adds enough value. Thanks. 

I'm talking to potential sellers in some select zip codes close to Downtown Kansas City, MO. I've targeted areas of town where I'm seeing a lot of flipping activity. Of course, there is the classic MAO formula for wholesale. [ARV X .7 - Repairs - Wholesale Fee = MAO] However, for a lot of these houses between 100K - 200K range, I would think flippers would be willing to operate at a slightly tighter margin, since the market is so hot, and they're able to offload successfully flipped houses quickly.

Obviously, this is subjective, but does anyone want to chime in on where they think the Kansas City, MO market is sitting regarding flipping, and how much margin they're looking to make from a flip when it's so competitive? I feel like I could get more deals to more flipping outfits if I weren't having to lowball so much to my potential seller lists. I'm excited to hear your answers. Much appreciated. 

My numbers were posted as a screen shot originally. I have reposted in text form. Thanks Joe for your response. Good to know your equation for rehab estimates. Of course, you'd then be able to pare down those costs based on a lighter rehab. Got it. 

Hey there. Anyone with more experience have a response for me here? I am hoping to run my estimates of repair/rehab costs by this forum to see if my estimations are correct for So Cal and San Diego specifically. I realize this is an extremely simplified version, but want to make sure I'm in the right ballpark since San Diego is its own kind of monster regarding contractors, material pricing, etc.

Do these simplified estimates seem about right? Perhaps a flip team has data regarding what their rehab estimates come out to. This would be helpful as I'm formulating my offers going forward. Any guidance anyone might have would be appreciated. Thanks in advance for any responses.

-Morgan

Thanks Kyle. I have a contract drafted up with inspection contingency, and will disclose my option to assign the contract in the original P&S. There are a lot of sample contracts floating around, and so wanted to make sure that one I might draft jives with California law. I appreciate your response.

I found this discussion very helpful. I'm getting into wholesaling and am trying to conquer this last hitch in regard to the P&S agreement, and the assignment contract. In California, is it required that you use the C.A.R. purchase and sale form specifically? Or can I draft up my own purchase and sale agreement with a real estate lawyer that includes only language that I need for my wholesale deals? For example, I don't really want language around financing, since I'm acting as a cash buyer. I want to include my "and/or assigns" language, etc.

My main question though is, does California law require that I use the specific C.A.R. P&S agreement?