Kansas City Real Estate & Investing Blog

New facebook Page for Olathe Real Estate - Keller Williams Realty

Chris Lengquist, RIPS (Keller Williams Realty) — Mon, 19 Oct 2009 22:29:17 -0500

I'd love to have you go on over to my new facebook page promoting real estate in and around Olathe, Kansas. As regular readers of this blog and of BBQCapital know, Olathe is a fast growing suburb of Kansas City, Missouri. The name of the site is Olathe Real Estate Keller Williams Realty.

Now, it's a new page so there aren't very many bells and whistles...yet. But I'd love to have you join if you are a facebook member and a regular reader of Kansas City Real Estate & Investing. What I discuss here and what I discuss there could be, will be, two different things.

Fan me!

http://www.facebook.com/home.php?#/pages/Olathe-KS/Olathe-Real-Estate-Keller-Williams-Realty/166719317560

Alzheimer's And Your Next Home

Chris Lengquist, RIPS (Keller Williams Realty) — Mon, 06 Jul 2009 10:23:43 -0500

Author’s Note: Sadly, this is based on a true story from this past weekend. Standing back at a distance it is kinda funny. Very funny, actually. Up close, knowing those involved, it’s really quite sad. Some of the minor facts and all of the names and addresses have been changed to protect the privacy of those involved.

Last Sunday Morning: Approx 2:35 am
A pounding comes from the front door of the house as emergency lights illuminate the early morning hours of quiet, suburban Overland Park, Kansas.

“We’ve had a 911 call saying that a woman is being held here against her will.”

Still groggy from being aroused from a deep slumber the homeowner stands next to yet another policeman as several other Overland Park police officers enter the home and do a quick walk-through checking each closet, bathroom and bedroom as well as the more open areas.

Imagine the confusion of the half-awake homeowner and his family. Imagine the police trying to determine if this is a prank call or a serious incident. Just try to imagine.

Last Sunday Morning: Approx 2:15 am
Awakening from his sleep Bob hears his mother speaking to someone unknown with fear dripping from each syllable. At first greyness clouds the mind. Quickly, however, a lucid realization that his mother is speaking to the local police department’s 911 operator (some twenty miles from Overland Park) comes over him as he leaps to his feet..

“You must help me. I’m at 123 Main Street, Overland Park. There is a strange man in my bed and people in my house I don’t recognize. I’m being held against my will. Hurry!”

Bob hurries to take the business end of the telephone away from his mother and begins to explain as rapidly as he can. But the wheels are already in motion. The address in Overland Park will be visited shortly by eager-to-please policemen as will the address where the phone call was made.

Over The Last Four Years
The mother in question here is close to me. Almost family, really. Two years ago I sold that house at 123 Main St., OP, KS for her and her husband whom I’ve known since 1975. Two years ago they packed up and left their house of forty-four years. The mother and her husband had raised eight children in that home. Forty-four Christmases. Forty-four Easters. Too many birthday parties to count between children, grandchildren and even this extra family member.

During this emotionally transitional time the early signs of Alzheimer’s began to show itself with “mom.” Slowly at first. But today there are days when the disease seems all too comfortable with it’s host. There are days she forgets that I have children. Worse, there are days when she forgets her own children.

And there are days when she is back in that house at 123 Main St. That house was comfortable. That house was home. That house was part of who she is. I guess she’s never really left that house. Not emotionally. And as for the new owners, I can only hope that they are patient, understanding and that one day that house will mean as much to them.

Kansas City, Kansas Duplex For Sale - Seeking Cash Flow?

Chris Lengquist, RIPS (Keller Williams Realty) — Tue, 09 Jun 2009 14:55:51 -0500

Out of state owner says SELL this Kansas City, Kansas duplex. The owner's priorities have changed over the years and now he is moving on. That means he's held on to this duplex for sale too long and just wants to move on. His loss is your gain. Each side rents at $695. One side is currently occupied and the other side is getting some minor renovation done before new tenants are placed. It's had a good occupancy history and has been professionally managed.

Wow! Owner just reduced to $87,500! He wants to move on and his urgency is your gain.

Do the math. You buy at $95,000. If each side is bringing in $695 you are at $16,680/yr. Follow? Look below.

Estimated Expenses

$1,668   Property management
$1,400   Vacancy
$   500 Utilities
$2,300   Taxes
$1,500   Repairs/maintenance
$   900   Insurance
$   500   Misc

Total Expenses equal $8,768

Net Operating Income is appox $7,912

Your mortgage payments add up to $505.63/mo. (That's 20% down leaving a mortgage of $76,000 at 7.0% interest since it's an investment property loan.)

NOI - Debt Service = Cash Flow

$7,912 - $6,068 = $1,844 /yr cash flow

Your Principal Reduction = $715 (approx 1st year)

Your Tax Benes = (NOI - interest - depreciation) $85 (approx 1st year)

Total 1st year benefits (approx) = $2,644
Cash invested (down payment, closing costs, etc) = $22,300 (approx)

First year return as a percentage = 11.9%

Now what would the numbers be if you managed the property yourself?

All numbers are of course estimates and this is not a guarantee of performance. Just trying to use all the numbers I know.

Independence Half Duplex For Rent - 2 Bedrooms, 1.5 Bathrooms

Chris Lengquist, RIPS (Keller Williams Realty) — Wed, 29 Apr 2009 10:24:51 -0500

This Independence half duplex for rent is available to the first qualified tenant that says "Mine!"

Located at 1400 S Harris Ave, Independence, MO this half duplex for rent is being leased for $625 per month and a $575 security deposit. We are an equal opportunity housing provider.

Downstairs you will find a size-able living room, dining room, kitchen (with pantry), half bath, utility room and a very large storage room. Upstairs to the two bedrooms, one full bathroom and plenty of closet space. New interior paint, clean carpet and homey atmosphere.

There is a very large yard to play in or grill in or whatever. There is a two space private parking area right in front.

This investment property for rent is being offered by Chris Lengquist of Keller Williams Realty, Diamond Partners, Inc. Chris is acting as the property manager for the landlord.

To schedule your private viewing please call Chris at 913.322.7505.

Kansas City house for Rent in Waldo Neighborhood

Chris Lengquist, RIPS (Keller Williams Realty) — Wed, 29 Apr 2009 10:10:29 -0500

This Kansas City house for rent in the Waldo neighborhood is a winner! Featuring 3 bedroomsand 1.5 bathrooms, wood floors, a HUGE basement and a heating & air conditioning system that is less than 18 months old. Did I mention the heating & air is high efficiency? That should help with the bills. Oh, and there is a one car garage.

Located on a corner lot across from a popular but quiet city park this home is a short walk to the bus routes of Holmes and 85th Street. And to all that Waldo has to offer. The yard has a dog walk and dogs are permitted with a $200 non-refundable pet deposit.

The address of this house for rent in Kansas City is 8301 Oak St., Kansas City, MO 64114. The asking rent is $845 per month with an $800 security deposit. We are an equal opportunity housing provider.

To view this home you need to call Chris at 913.322.7505. Chris is a licensed real estate agent in the states of Kansas and Missouri with Keller Williams Realty, Diamond Partners and is acting as the property manager for the landlord.

Investment Property in Olathe, Kansas For Sale

Chris Lengquist, RIPS (Keller Williams Realty) — Fri, 16 Jan 2009 11:22:23 -0600

Olathe Duplex For Sale

This is not my listing. But I am really liking this Olathe Duplex that is for sale. Priced at $184,950 the price has been lowered from an original asking price of $200,000...which I thought was a little high. Each side is 2 bedrooms and 1.5 bathrooms with a one car garage per side. (Not my photo so sorry about the quality.)

The really good news? It's in Olathe which is still a healthy real estate market. It's across the street...literally...from Mid American Nazarene University. And just minutes from I-35 and everything Johnson County, Kansas has to offer.

I think you can expect rents in the $750 - $775 range. The duplex is currently not rented and is owned by the Nazarene Church from what I understand.

If you are in the market, can qualify for the investment loan and have the cash on hand to make this work I strongly recommend you take a close look at this place. Contact me today if you are looking for an investment property in the Kansas City area. My phone number is 913.568.1579.

Snapshot of the Kansas City Real Estate Market

Chris Lengquist, RIPS (Keller Williams Realty) — Fri, 02 Jan 2009 08:41:52 -0600

Kansas City Real Estate: A Glimpse At The Current Market

I'm going to break for this post from talking about Kansas City real estate investment property and talk about a specific part of the Kansas City real estate market and that is Johnson County, Kansas. You see, a real estate investor client of mine who has purchased a few homes from me has asked me to help his son and fiance to buy their first home. They are looking for something that will give them the warm and fuzzies but also be a solid buy and a good investment.

What they want is a home in the Overland Park/Leawood area of town priced between $175,000 and $200,000 with at least 3 bedrooms, 2 baths, 2 garages...you know the drill. Most of their money will be spent on the down payment, closing costs and move-in expenses so they don't want or need a fixer. So what can we find them "under-valued?"

Let's break for a moment and talk about mindset. With all the bad news thrown our way day after day after day (by the way, go back and read my posts from a couple years back...you'll see I never bought in to the whole "boom" thing for KC, either) you'd think you could pick up houses on the cheap all day every day. So what exactly does "under value" mean?

In my humble opinion Johnson County, Kansas is, has been and will continue to be the economic engine of Kansas City. Oh, I know KC has more population and business headquarters and all that. But the money and exec types have always ventured over to the Kansas side. (Calm down Missouri. I didn't say all the money and execs and I didn't say we were better than you.) ;) Although our football team beat your football team...

Real estate values in the Kansas suburbs simply have not dropped the way people have seen real estate values drop as little as a few miles away on the Missouri side of the line. There are only 45 homes available that meet the criteria of these new buyers and really only 9 of them look all that appealing. Days on market? Looks like about 122 is the average...throwing out one on the market for about 2 years.

A closer look reveals some more interesting thoughts about our current real estate market in Johnson County, KS...or at least this part of JoCo. In the last 6 months (that's what appraisers are looking at, right?) the average days on market for homes in that price range has been 73 for the solds. Average asking price has been $187,421 with average sales price right at $181,738. That's still 97% of asking price!

Does that sound like a depressed real estate market to you? No. Houses are not selling in a week or two any more. No. You can't just ask whatever you want price wise, either. But ask yourself this the next time you are hearing all the bad real estate news: What does this have to do with me and my current situation? Maybe everything. Maybe nothing. That's why you need professional help when trying to decide.

One last note. And this will concern Kansas City real estate investing. I've been accused of being a snob when it comes to helping people buy residential investment property. But if you'll look at the rental properties I've sold to my buyers over the last few years I'd put their current values next to any current values in the country. Some have actually appreciated even as we stand today. Others are even and a few are actually a little depressed. But in all cases rent covers the costs as we initially calculated. So even the depressed houses have the wherewithal to ride this storm out.

Portraits Today Studios Opening In Olathe, Kansas November 1

Chris Lengquist, RIPS (Keller Williams Realty) — Sat, 25 Oct 2008 20:41:31 -0500

Portraits Today Studios is opening a store in Olathe! Portraits Today Studios is a same-day portrait studio that delivers your photos to you the same day you take them. Usually within an hour after your photo session.

What does this have to do with real estate? Truthfully, not much. But that's okay. More businesses opening in Olathe shows that the economy here is moving forward. The more businesses, the more jobs. The more jobs, the more demand for housing. And etc.

Check out their website if you are looking for professional photograhpers in the Olathe area for your holiday and family photos.

Kansas City Rehab & Rent versus Flipping

Chris Lengquist, RIPS (Keller Williams Realty) — Thu, 14 Aug 2008 13:40:48 -0500

Why am I teaching a class next Saturday about Rehabbing and Renting Kansas City investment property versus flipping homes? Two main reasons;

Finding a home that has the numbers to flip aren't nearly as numerous (or in as good of neighborhoods) as finding homes to Rehab & Rent.
Flipping real estate is simply an income replacement...or supplement. Rehabbing and Renting is a method of generating a little extra cash flow while building equity for your future. Really just a more hands on way of becoming a "passive" real estate investor.

The Numbers Of Rehabbing & Renting
Right off the bat when you are looking for a home to Rehab & Rent vs Flip you can find a house that sells for 6% - 8% more and still make money! Now, that may not sound like a lot but have you tried to buy houses at the prices needed to flip? It's inside that last 10% where people make and lose money. And it's also inside that last 10% where sellers seldom go.

The 6% - 8% savings comes from you not having to sell the property when you are done rehabbing. You save the real estate agent's costs and the closing costs. And before you tell me "I can sell it myself" you had better pay attention to what market we are in.

And think about this, rehabbing to a rental standard is much different than rehabbing to a resale standard. If I know I'm going to rent this investment property I'm far more likely to downgrade the carpet a little, downgrade the paint a little, downgrade several things...a little. I don't want to go cheap. I do want it inhabitable, desirable and functional. I just don't need it to "Wow!" a prospective buyer. Therefore, cost savings here that I can spend later when it's time to sell...when I have even more equity in the house.

Negotiating The Purchase Of An Investment Property
It doesn't take a genius to know that most people don't wish to give their homes away. You can negotiate them down based on cost of improvements necessary, equity they may have in the home and a whole host of other factors.

But too many "flippers" bought homes that were priced too high. Flippers get frustrated working with me because I won't let them buy homes they are going to lose money on.

"But if I can make $8,000-$10,000 on this I'll be fine."

Ah, have you ever flipped a house? How about more than one? You can go through your "profit" of $8,000-$10,000 in extra, unexpected repairs and price reductions in a heart beat.

In flipping you need to buy a house as follows: ARV - Quick Sales Discount (5%-10%) - Cost of Repair - Holding Cost - Sales Costs - Expected profit (15% - 20%) = Purchase Cost.

When you are rehabbing a house and then holding it as an investment property for rental purposes you can add back into your purchase price the Quick Sales Discount (or at least some of it) and the Sales Costs. This will immediately include a whole lot of homes you didn't necessarily have access to before.

So how would you like to own a home for rental purposes that you purchased and rehabbed and still saved 15% - 20% below the actual value of the home? You'd have all that as equity for your future. Buying an income property can be done so many different ways. This is but one. If you ‘d like to learn more about Rehab & Rent just see the all the details of an upcoming workshop I've got going on.

Originally posted on Kansas City Real Estate Investing.

Rehab and Rent Workshop for the Kansas City Real Estate Investor

Chris Lengquist, RIPS (Keller Williams Realty) — Sat, 02 Aug 2008 19:44:46 -0500

There will be a Rehab & Rent Workshop put on by Chris Lengquist of Keller Williams Realty in Olathe on Saturday August 23, 2008 at 9:00 am and ending about noon. Space is limited so you must register to attend this workshop designed to teach you the numbers and philosophy of buying a home under market, rehabbing it to rental standards and then renting the home for cash flow. The location will be at Keller Williams Realty Olathe located at 801 N MurLen Rd, Olathe, KS.

Guest speaker Ryan Dusenberry will also be in attendance to share his own personal experiences with this technique that has allowed him to build his investment property portfolio to 9 properties...and he's still in his mid-twenties. And of course Chris Lengquist will be there to teach the fundamentals of how to evaluate these properties to choose between the winners and the losers.

*** *** *** *** ***

Have you ever wanted to own rental property in the Kansas City area?
Have you ever wanted to rehab a house for the profit?
Have you ever been frustrated with the available inventory of rental property and rehab property?
Have you ever wanted to know how to evaluate rental property before you buy?
Have you ever wanted to hear from someone actually doing it?
Have you ever wanted to hear from a lender on the subject of rehabbing and renting?

*** *** *** *** ***

There is no charge for this Rehab & Rent Workshop. But you must register. Simply click on the register highlights and fill out the form and indicate that you are registering for this workshop. There will be no books to buy, no seminars to sign up for at outrageous fees and no tapes proclaiming any get rich quick schemes.

This is a hands on workshop so feel free to bring a calculator, pencil and paper. Bring your questions and a good attitude.

*** *** *** *** ***

What if you could buy a home or duplex that was for sale significantly under market? Maybe not enough under market to flip the house but enough to rehab and then rent. You'd have great cash flow and a fair amount of equity just sitting in the property waiting for your next move later down the line.

More of this strategy will be discussed in detail at the Rehab & Rent Workshop. Register now.

Originally posted on Kansas City Real Estate Investing.

Kansas City First Time Home Buyers

Chris Lengquist, RIPS (Keller Williams Realty) — Thu, 24 Jul 2008 10:06:37 -0500

Attention first time home buyers in Kansas City. And yes, that includes Overland Park, Olathe and a dozen other cities. The current mortgage crisis will now benefit you!

The House has passed a bill that will likely become law within the week. It's a bill that no one wants to stand in the way of so it's pretty much a done deal. How will this help the first time home buyer in the Kansas City area? Well, if you;

Are a first time home buyer
Have purchased or will purchase a home between April 9, 2008 and July 1, 2009
Have individual income of less than $75,000 or as a couple earn less than $150,000

If you meet those 3 standards you are eligible for a $7,500 tax credit.

Now, you will be expected to pay that back over the course of the next 15 years interest free. So it's not free money. But it's discounted money. If inflation ends up being 5% this year, well...hopefully you get the picture. I'll work out the math for you a little later today but you will be saving hundreds and possible a couple thousand in interest over the course of that 15 years.

(Further details will be announced as I dig deeper into this Housing Rescue Bill.)

So if you are a first time home buyer and looking to purchase a home in the Kansas City area you need to contact me today. Regardless of where you are looking be it Olathe, Overland Park, Blue Springs, Lee's Summit, Shawnee or a host of other suburban cities or Kansas City. If I am not knowledgeable about the area of town you are looking I'll hook you up with someone who is.

With a FHA loan, 3% of the purchase price and good credit this makes it easier and more economically feasible to be a first time home buyer than ever before!

Buy & Hold Real Estate Investing Works In Kansas City

Chris Lengquist, RIPS (Keller Williams Realty) — Fri, 11 Jul 2008 11:11:21 -0500

It's Called Buy & Hold Real Estate Investing

Yesterday I addressed those of you who may be stuck in the "No Sell Zone" of real estate investing. I'm not gonna recap it here other than to say that we were looking at what happens if you are actually losing money on your real estate investments today. By losing money I mean your yearly outgo is exceeding your yearly income.

I've worked up a scenario below to show you that it's not all that bad. You can and will survive. You may not make as much money as you hoped. But it's called investing. Nothing is guaranteed. (Keeping in mind that you probably bought on quasi-fundamentals to begin with.)

The Ground Rules
Below is just a worksheet example. Obviously, you should not misconstrue this to be advice aimed at you or your situation without the competent advice of a real estate investment adviser familiar with your situation, your CPA or your attorney.

Also, we are gonna say that this buyer was thrilled to buy a $170,000 duplex in January of 2006 with 10% down at 6.5%. His PITI works out to be roughly $1239/mo and he's thrilled because he collects $1,350/mo in scheduled rents. (I said scheduled.) But he nor his REALTOR ever took into account vacancies, utilities when vacant, repairs, cost of handyman, advertising and other miscellaneous costs of owning investment property that totals up to about $2,800/yr.

We are NOT figuring any rent increases for 5 years and then we lock it in at a 5% increase for the remainder of time. (Are you still with me? I'm trying to be ridiculously fair to the most pessimistic of our readers.)

And even though there is still appreciable growth in many areas of KC (no, I'm not kidding) I'm taking a "nuclear winter" approach here. You'll note the decrease in values followed by modest growth potential in the last few years of 3% and then 4%. (Historically KC goes about 4.8%-5% a year. Do the math.)

Lastly, we are NOT even going to take into account depreciation. Or the additional tax benefits of owning rental property.

Value Of Sample Investor's Duplex
2006          $170,000
2007          $170,000
2008          $166,000
2009          $165,000
2010          $169,000
2011          $174,000
2012          $179,000
2013          $186,000

His year 1 through 5's expenses run $17,668/yr. ($14,868 in PITI and $2,800 in misc. expenses) and his income is $16,200/yr resulting in a net loss of $1,468/yr. That's a net loss of $7,340 over the 5 years. Remember that.

Now in 2011 his rents increase 5% limiting his losses to $658/yr. Over the 3 years that totals $1,974 and when added to the $7,340 totals $9,314.

And since I generally recommend (case by case basis, people) in Kansas City exchanging your real estate investments every 5-8 years lets say sales costs are gonna run 6.5% off the 186,000. So what do we have?

Sales Price             $186,000
Cost of sale           $ 12,090
Total of losses      $ 9,314
Remaining loan balance $135,645
Original equity       $17,000

Capital Gains $11,951

See. It wasn't all that bad. If you had taken that original $17,000 and put it in a CD at your local bank at 5% per year you would have avoided a lot of trouble and headaches and risk but also only incurred a capital gain of about $8,117.

Keep in mind we didn't figure all the tax benefits along that way that would more than compensate you for your trouble.

Do I know when this correction period will end? No. Can I tell the future? No. But I've laid out a fairly bleak projection here and you still came out ahead. And that's if you bought too high. What if you bought now when you have some leverage?

Olathe, Kansas Housing Market

Chris Lengquist, RIPS (Keller Williams Realty) — Wed, 11 Jun 2008 11:04:20 -0500

Olathe, Kansas: Spotlight On Why I Like This Market

Olathe, Kansas has been mentioned by me time and time again as a market that I am enamored with. Sure, I live here. But there is much more to it. For real estate investors and Joe & Mary Homebuyer alike Olathe offers the opportunity for solid appreciation even in these tougher times. If it's alright with you I'm going to take a minute and show you (and link you) to what I'm talking about.

Top 15 City in America
As recently as 2006 when CNNMoney ranked the Top 100 Cities in America, Olathe finished #13. Neighboring Overland Park finished #6. Olathe currently has a population hovering around 114,500 (up 2,400 since 2006) and a Median Family Income right around $79,100.

Olathe Housing Stats
The Kansas City Star's zip code appreciation map shows the two predominant Olathe zip codes with appreciation over the last year. 66061 came in at 4.3% while 66062 came in at 7.6%. And as you can see by clicking on the image for Olathe Housing Stats for the last six months that we are still selling homes at a pretty good pace. I showed here on our Olathe Real Estate blog that inventory for single family homes is at about a four months. Technically, still a Seller's Market even though people got spoiled by the markets of past years where you would sell a house in 45 days or less, sometimes.

Olathe Job Growth
Olathe is really doing well in the Job Growth category, as well. I've written here before how Ft. Dodge Animal Health has moved in. Along with Farmer's Insurance. A multitude of call centers are relocating to Olathe, too. US Bank has a large tech center here in Olathe now. And we haven't even mentioned that the world headquarters of Garmin is located right here in Olathe.

Jobs seem to be coming to Olathe every month. To keep up with the growth of jobs in and around Olathe I would encourage you to visit the Olathe Chamber of Commerce's Breaking Newspage. I think you'll find the website by the Olathe Chamber to be very easy to navigate and one of the most informative Chamber sites I've ever visited.

Olathe's Quality of Life
Want to know the reason I live in Olathe? The Olathe School District. Period. As a father of four (two with special needs) I needed a school district that could work with my children. We interviewed the three predominant school districts in Johnson County, Kansas and felt strongly Olathe was where we could be best served. Because in addition to the two special needs kids we have one that is on an Advanced Placement path. And as we enter his high school years he is going to get to take advantage of the Olathe School District's 21st Century Program. He'll be taking part in Olathe Northwest High School's e-Communications Program. We can hardly wait.

In addition, Olathe is easy to navigate. Has quite a few parks for your enjoyment including Heritage Park, the Indian Creek Trailway and Frontier Park where the City hosts a series of free concerts every year. I'm usually in attendance.

Olathe's Potential For Real Estate Investment
Olathe is not a "cash flow" city. At least in my mind. It will usually take you about 20% down to break-even on a duplex here or about 25%-30% to break-even on a single family house. But having said that, there are few areas around Kansas City...or the Midwest for that matter...that you are going to get better long term, steady growth.

So for my investors I will usually recommend they have only part of their portfolio parked in Olathe. If you own five investment properties I might recommend two be in Olathe and the other three be in cities where you will be able to leverage your money more in the 90% LTV range. Because just like it's nice to diversify your investment holdings it's nice to diversify your real estate investments.

A for instance would be of a "pocket listing" I have. It's a duplex with 2 bedrooms and 2 baths per side. Rents are a steady $750 with vacancies nearly non-existent. So you have a Gross Scheduled Income of $18,000. Asking price is $191,000. Your Gross Rent Multiplier is 10.61. Not too shabby.

Closing Thoughts on Olathe
I hope you have enjoyed our little tour of Olathe. If you are thinking of moving to Olathe take some real time to follow the links and explore our city. Give myself or our team a call or contact us if you need help selecting housing that is suitable for you and your family.

If you are a real estate investor be sure to ask for specific examples if you are looking to add a rental property or two to your investment portfolio.

For Rent in Blue Springs, Missouri - Newer Duplex w/ Rent Incentives

Chris Lengquist, RIPS (Keller Williams Realty) — Thu, 05 Jun 2008 18:16:28 -0500

This newer duplex for rent in Blue Springs, Missouri is an excellent value at $850/mo. Featuring 3 bedrooms, 2 full bathrooms and a 1 car attached garage with a private deck for those summer barbeques.

Just a block or so off Adams Dairy Pkwy and within only a few minutes walk to the schools and YMCA on the southeast side of Blue Springs this duplex for rent is perfect for almost anyone.

Large rooms. Clean carpeting. Refigerator included. Dishwasher and so much more.

I am NOT the property manager for this duplex but the owners have asked if I would help them advertise.

To find out more about this rental property in Blue Springs contact Beth at epg@nusports.com or call her on her mobile phone at 847.271.4865. Don't let the area code fool you. She's a local here in the Kansas City area.

You might want to hurry though. The rent incentives will not last long! Click here to find out more about this Blue Springs, Missouri duplex for rent.

Olathe - Kansas City Real Estate Homes For Sale Has A New Resource

Chris Lengquist, RIPS (Keller Williams Realty) — Thu, 05 Jun 2008 08:00:05 -0500

Olathe Kansas City real estate homes for sale has a new resource. If you are looking for a resource to help you locate homes for sale in the Olathe or Kansas City market areas then you will want to visit the our newest website at www.OlatheKansasCityRealEstate.com.

With easy to use buttons to help you conduct your free MLS style home search by either map, zip code or school district.

You can either use the system to search for real estate for sale or you can register and save your searches. The choice is yours and yours alone.

And if you are a home seller in the Olathe or Kansas City areas you'll find resources to help you stage your home, price your home and market your home. And of course, should you want to hire real estate professionals to get the job done we, I, hope that you will consider interviewing us.

Did you know that in Kansas we had year on year appreciation of 2.7%...according to the US Government's index on housing. Yes, we were one of only seven states last year with positive appreciation. Missouri was too with 1.7%. The Kansas City area was up just over 1%. My guess is that would be much higher if not for a couple areas I warned real estate investors to stay out of, any way.

Go ahead and jump on over to www.olathekansascityrealestate.com and let us know what you think!

Chris Lengquist
Keller Williams Realty
Diamond Partners, Inc
Olathe, Kansas
913.322.7515

Kansas City, Kansas Duplex For Sale - Cash Flow!

Chris Lengquist, RIPS (Keller Williams Realty) — Mon, 14 Apr 2008 12:16:51 -0500

1542-44 N 63rd Terrace
Kansas City, KS

This duplex for sale has cash flow!

Located in Kansas City, Kansas this duplex for sale features 2 bedrooms, 1 full bath, 1 half bath and 1 car garage for each side. Priced at $119,999 with rents bringing between $665 & $685 per side. One side is currently occupied with tenant and the other side has someone moving out very soon that we will be renting. Vacancy in the area is low as I saw only one "For Rent" sign on the entire street filled with duplexes.

This property has been managed professionally and if interested I can put you in touch with the property manager. The Wyandotte County, Kansas tax appraisal says this income property is worth $130,700 but the out-of-state seller says SELL! So we've priced it to sell. Inspections are welcome but this home will be sold "as is" due to the favorable pricing.

Do not hesitate to contact me if you have any questions about this duplex for sale with good cash flow in Kansas City.

Offered for sale by Chris Lengquist of Keller Williams Realty in Olathe, Kansas. For all real estate investing needs please feel free to call Chris at 913.322.7515.

The Fallacy of Depending on Cash On Cash Returns

Chris Lengquist, RIPS (Keller Williams Realty) — Thu, 10 Apr 2008 12:44:36 -0500

Cash On Cash And Why You May Not Wish To Worry About It

10% Cash On Cash is the Holy Grail to a lot of real estate investors. I just had the conversation again with someone in their very early thirties telling me why they needed a 10% Cash On Cash return. That's what his father had said he absolutely had to be sure of before buying an income property. And if I was his father's counselor I may or may not agree depending on his situation. But for this younger man with great income, a solid future and a desire to build assets, I couldn't disagree more strongly.

REALTOR DISCLAIMER
Remember, as a professional real estate agent that works everyday with real estate investment property I have access to not only my own personal experiences but the personal experiences of people that, in total, own hundreds of rental homes. I make it my business to talk to them and to tap their wisdom. From those experiences I offer my advice after getting knowledgeable with each individual's situation. But ultimately, your decision is your decision. I work for you. Not the other way around. Now, I may have you sign a disclaimer....

Listen to this very carefully. To the extent that you chase Cash on Cash returns you retard your capital growth. It's really that simple. Why?

Cash flow investment property with little to nothing down, at least here in the Kansas City area, tends to be in areas and neighborhoods that don't appreciate very well in relationship to their surrounding communities.
For income properties that will appreciate at par or above, you will need to put more money down, i.e. 20% versus 10%, to get the higher Cash Flow Before Taxes to benefit your Cash On Cash returns.

Take for example a Blue Springs, MO duplex I've been keeping my eye on. This particular rental property is about 40 years old (give or take) but has been nicely cared for, has a brick exterior with a newer roof, windows, carpeting, ceramic tile and more. I'm sure the purchase price will be somewhere around $136,500 with the seller's paying 2% closing costs. Rents are $1,175/mo and it's 100% occupied in a nice little quiet neighborhood that stays rented with quality tenants.

Without showing you all my calculations here I can tell you that with 10% down on this property your cash flow is about $53 a year after all expenses calculated. (And yes, I mean all.) That translates to a 0.4% Cash On Cash return. That's right there with having a passbook savings account at Capitol Federal Savings. Not good. But wait, there's more! (Apologies to Ronco.) When you calculate Cash Flow Before Taxes, Principal Reduction and Depreciation your capital growth on your investment is 13.9%.

Using the same income and expenses with 20% down, the corresponding lower interests rates and no PMI the Cash Flow Before Taxes jumps to $1,457 a year. That's a Cash On Cash return of 5.2%. Now we're getting better, right? Well, no. Not really. Because your capital growth has dropped from 13.9% with 10% down to this scenario at 10.6% capital growth.

Note: No appreciation was used in the work-up of these numbers. But what if it had?

Well, not only would your capital growth be better but you'd have two rental properties working for you where as before, with 20% down and better Cash On Cash you only have one rental property working for you.

Are you following me here?

Heck, even if you are not believe me! Or call me, come in an we'll sit down and work-up a real property and by the time we're done you'll be able to teach me all about it. Again, depending on your stage in life, investment goals, long term plans and available cash reserves this may not be the best strategy. But for many, many, many people this argument will hold very true.

Lawrence, Kansas Condo For Sale

Chris Lengquist, RIPS (Keller Williams Realty) — Mon, 31 Mar 2008 13:11:12 -0500

Lawrence Condo For Sale

A very good friend of mine wants to sell his condo he bought for his kid when she was going to school at the University of Kansas. It's about 1/2 mile off campus on the west side, has two bedrooms, two full baths, a living room with a fire place, a separate dining room, laundry room and a lanai.

Now, the lanai has also been known to be used as a bedroom. Your likely tenants are college kids, after all.

All appliances including a new oven/range, older washer and dryer, and an older refrigerator all stay with the property. There is also newer carpeting and vinyl flooring, less than a year old. New windows and new paint, as well.

We're getting together this evening to discuss price. But I would say about $84,500. Rents should be about $695-$725. And of course as close to campus as it is I'm sure renting is not a huge issue. (Photos are yet to come. I'm just getting the word out early.)

So if you are looking for a rental property as an investment in Lawrence, Kansas do not hesitate to drop me a line. Or it could make a great place for your student to live while you are paying tuition.

Kansas City Power & Light District

Chris Lengquist, RIPS (Keller Williams Realty) — Sat, 15 Mar 2008 14:18:05 -0500

Kansas City Power & Light District: Two Thumbs Up

The Kansas City Power & Light District gets a thumbs up from me and an another from by buddy. We spent the day there yesterday hanging out in KC Live with all the festivities for the Big XII Tournament. As you can see from the photo, there was not only a sold out Sprint Center but literally tens of thousands more came down to drink beer or sodas, hang out with friends and watch the game on the 12-15 foot television screen that you can see in the upper right hand corner of the photo.

I have no idea on whether or not this will be a long term economic success. I can tell you from a civic pride perspective that I felt like I was in a real city, again. The whole atmosphere reminded me very much of Baltimore's Inner Harbor area. (Yes, I know there isn't any water within 3/4 of a mile of the place.)

We grabbed a bite to eat at the Gordon-Biersch brewery. Food was great and their own brews were good. I loved the Marzen. GB describes it as "Our most popular beer which is a smooth, mildly sweet, auburn colored lager."

The crowd was very midwestern. Well-behaved and friendly. We spoke with people from Iowa, Missouri, Kansas, Texas and Oklahoma. I even saw that Colorado brought their fan!

Chris, what does this have to do with real estate investing in Kansas City? Well, nothing really. Or everything. See, I believe cities will tell you whether they are moving forward or backwards. And that will have a determination on the desireability of a city for future work-forces and employers. And this bodes well.

Despite many fears, parking was not too difficult to find so long as you don't mind a 5-10 minute walk. And really, if you are going down to eat and drink all day, I don't think the walk will hurt you.

So the next time you are looking for something to do I would love to encourage you to go on down to the Kansas City Power & Light District. Eat dinner. Listen to one of the many live shows they have planned. Catch an event at the Sprint Center or visit the College Basketball Experience.

Reprinted with permission from BBQCapital.com - A Kansas City real estate investing website.

Selling Your Rental Property In A Buyer's Market

Chris Lengquist, RIPS (Keller Williams Realty) — Sun, 24 Feb 2008 11:04:35 -0600

Selling Your Rental Property In A Buyer's Market

Kansas City is currently experiencing a buyer's market. Investment property is a little better off. Certain areas of the city are better than others. Let me give you a picture of what the investment market in Kansas City currently looks like.

Below will be a couple sets of numbers for you to take a look at. One is for Johnson County, Kansas duplexes and the other is for Jackson County, MO duplexes. Now, the numbers only include duplexes priced for sale between $100,000 and $300,000. I just figured below $100,000 isn't usually what my clients are looking for and above $300,000 just isn't going to be profitable within the parameters I use.

Johnson County, Kansas Duplex Activity
current as of 2.21.2008

Active =    34
Pending =   3
Sold =        52 (within previous 12 months)

Jackson County, Missouri Duplex Activity
current as of 2.21.2008

Active =   147
Pending =    5
Sold =      100 (within previous 12 months)

Right away you should be able to see the market within the market. Johnson County has about a 7.5 month supply of homes while Jackson County has about a 16.5 month supply of homes. Further emphasizing that all real estate is local. And local can be broken down into cities from country, zip codes within the city and sudivision from the zip code.

As a seller of residential investment property in Kansas City you need to know that you are in for some fierce competition. And while some sellers may think they know that what I see on the market is usually overpriced, under cared for and have crappy tenants.

Why, I know of a duplex in Overland Park that has been on the market for quite some time and the real estate agent has "motivated seller" on her comments. Further inquiry discovers that one side has a tenant that isn't paying any rent because they made improvements to the property and don't feel they owe rent for some time to come. The other side unilaterally decided their rent was too high and cut their payment by $200 a month.

And the seller still wants retail for this Overland Park duplex!!!???!!!

There is no question I could find an investor to take this headache off their hands. But not at retail. So what can you do to be sure you can move your Kansas City are investment property if you need to cash out?

Investment Property Selling Tips

Price it right. Know where the price point is for your particular class of investment property (and location) that the next would-be real estate investor will pull the trigger. This is not the market to "test" the waters.
100% occupancy with quality tenants. I said quality tenants. Tenants with good payment history. Tenants with security deposits. Tenants with time left on their leases. Tenants that don't trash their rentals.
Deferred maintenance accounted for in the pricing or repaired before marketing. Remember, if you milked the property dry by collecting rent and not fixing a thing you will pay for it on your sales price! You might be able to get away with that crap during a seller's market. But guess what? This isn't a seller's market.
Choose the right real estate agent. I'm not the only one in Kansas City that knows and understand real estate investment property. (I am, however, the best. :) - Sorry for the ego trip.) There are several good agents around the city. But that number doesn't exceed 10-12 out of the 10,000+ licensed real estate agents around KC.
Be prepared to assist with closing costs. Investors, and that is who will be in the market for your duplex, like to get in with as little cash as possible to maximize their equitable returns.
Be patient. Do all of this correctly and you should sell inside 4-6 months. In fact, if you do all this correctly we should sell inside 4-6 weeks going into spring. But the real estate investor's credit standards have changed drastically over the last year. You don't have to like it. But it means fewer people are qualified to buy your rental property.

I've used duplexes as the prime examples here. But the same is true for all investment class real estate whether it be single family homes, apartments or four-plexes.

You can definitely sell your investment property in this market. In fact there is a need for quality inventory. Feel free to give me a call, write me an email or leave a comment if you have any questions or comments.

Reprinted by Chris Lengquist of Keller Williams Realty, Diamond Partners, Inc of Olathe, Kansas from BBQCapital. BBQCapital is a blog devoted to Kansas City real estate investing.

Real Estate Investing Class at UMKC

Chris Lengquist, RIPS (Keller Williams Realty) — Wed, 20 Feb 2008 19:39:06 -0600

Real Estate Investing Class at UMKC

Once again I will be teaching at UMKC on March 1 and the topic will be The Basics of Real Estate Investing. If you are a neophyte trying to decide to whom you should listen to I would encourage you to come on out.

You'll need to put in your reservation with UMKC's Communiversity. Just follow the link or give them a call at 816.235.1448.

As always I try to make it at least a little bit of fun. We'll see you there!

Kansas City Real Estate Bloggers Social Event

Chris Lengquist, RIPS (Keller Williams Realty) — Mon, 18 Feb 2008 18:59:35 -0600

Networking is key for real estate agents everywhere. And while there have been blogger get-togethers that I know of in San Diego, and Los Angeles and Clearwater I have yet to see one here in Kansas City. So unilaterally I am setting up a get-together.

Kansas City Real Estate Bloggers Event

When: Thursday, February 28th 6:30-8:30 pm
Where: 810 Zone on The Plaza (I live in Olathe, but I thought this would be central. We'll move it around in the future.

While everyone may not be in to sports, it's a large bar that has a lot of fun things to do. If you want to eat, there are eats. If you are a drinker, there are drinks. If you just want a Coke or a coffee, they have that, too.

I read everybody's work. Now I'd like to meet you in person. Especially you Fran! Thanks for the referrals!!!!

Leave a response in the comments section or send me an email. Either way, I'd love to know if you can make it or not!

Oh! And by the way. This is not exclusive to active|rain bloggers. If you know of a real estate blogger on a different forum, invite them! We should all meet...at least once.

New Zip Code Appreciation (Depreciation) Map for Kansas City Real Estate

Chris Lengquist, RIPS (Keller Williams Realty) — Sun, 17 Feb 2008 12:37:35 -0600

New Zip Code Appreciation (Depreciation) Map for Kansas City Real Estate

Last year I linked to the the Kansas City's Star's report on housing appreciation in the Kansas City metro area. By in large there was modest appreciation and some depreciation...but not enough to worry about in most places.

This year's interactive map shows a different story. Read the entire story here. (NOTE:If the Kansas City Star holds true they will not have this map up indefinitely. So it's possible the link will lead you to nowhere after a couple weeks. If they do you can purchase a zip code map for Kansas City by clicking Zip Code Map.) Now let's put the numbers under the microscope and see what we see. Especially for those out-of-staters that read this Kansas City real estate investing blog. You need to have the full story interpreted.

Everyday I get would be real estate investors calling from around the country. Especially California. They are always wanting to flip houses and/or buy the lower priced houses in the city so they can get "good cash flow."

The houses they like to target are generally located in the following zip codes:

64130 -23.4% -19.6%
64132 -12.8% -12.4%
64134 -14.6% - 9.3%

Next to the zip codes above is the "appreciation" rate for those areas in the last year, followed by the Kansas City Star's explanation of the appreciation rates for all years dating back to 2003.

Now lets look at the zip codes where I've had my last 10 transactions since December:

66204 + 1.4% +11.7% (1 unit)
64083 + 6.0% N/A (3 units)
66106 -10.5% +0.7% (We got a steal on a rehab)
64064 + 6.0% +17.4% (2 units)
Gardner - not listed though I suspect close to Olathe's 66062 at +7.6% +43.2%

Hey, out-of-state investors. Do you see what I've been talking about for the last 3 years?

While much of the country suffers through a housing correction not seen in many's recent memory here in Kansas City the real estate investor can still find opportunity. Yes, we have areas that are suffering greatly. They are not areas that I've endorsed anyway. Successful real estate investing takes study, analysis and local knowledge.

And that is true whether you are investing in real estate around Los Angeles, Sacramento, Washington, DC, New York or right here in ole KC.

Reprinted with permission from BBQ Capital.

Street View From Google: A Time-Saving Tool

Chris Lengquist, RIPS (Keller Williams Realty) — Thu, 14 Feb 2008 15:31:55 -0600

Ever get a call from a listing prospect and you want to have an idea of what the house looks like before you get there? Or wonder if the home has good curb appeal?

Well, now there is Google Street View. Simply type in an address on the Google search box and a map will appear. If your home's street is highlighted in blue then there should be a photo box that you can click on. Click on that photo and you'll get Street View.

It's pretty handy. And pretty cool. But a couple warnings;

Not every street is available.
Not every view is accurate.

For instance, the photo up top is of one of my rental properties in Olathe, Kansas. When I typed in the address it actually had me almost 1/4 of a mile off to the west. So I just moved the photo on down the street until I got there. But it would be harder if I didn't know that the house pictured wasn't my house. But like I said, this is an income property of mine, so I figured it out pretty quickly.

Play with it and have fun. It's pretty easy to use.

An Example of Using Proper Leverage For Your Kansas City Real Estate Investments

Chris Lengquist, RIPS (Keller Williams Realty) — Tue, 05 Feb 2008 18:42:16 -0600

Using leverage properly when you are investing in real estate is the key to economic success. Recently I wrote two different blog posts revolving around a duplex in Olathe that I know was purchased in 1997 for $106,000.

The two posts that were written show exactly how the leverage could have been used and the drastically two different results each produced. I would really urge you, the Kansas City area real estate investor, to take a few minute and read through each of the posts.

Real Life Olathe Investment Property Story: Part I

Real Life Olathe Investment Property Story: Part II

Now what I want you to realize is that any investing is good for your retirement. And owning a rental property that you buy and hold forever is better than not owning any income property at all. But you really need to examine the two posts to see what the possibilities hold.

And I'd love you to come back and let me know your thoughts.

Chris Lengquist
Keller Williams Realty
Olathe, Kansas
913.568.1579
listwithchris@kw.com
www.BBQCapital.com