Kansas City Missouri Criteria Sanity Check

[Ryan Lloyd]

Just starting out investing in the KCMO area and working on coming up with my criteria for real estate purchases in the area. Below is my first stab at things. Would love to know from others in the area if I'm off base with expecting to find deals like this? Are ya'll seeing the 1% rule met for example or purchasing at 70% ARV etc...

Beds/Baths: 2-3 Bedroom

Size: 700-1900 sqft

Cash Flow: >$100 cash flow

1% guideline (not rule) on rents

• Example: $100,000 purchase price
• $100,000 * .1 = $1,000 minimum rent for property

75% guideline (not rule): ARV * .75 = Max offer minus renovation costs

• Example: $100,000 ARV and $20,000 renovation costs
• $100,000 * .75 = $75,000 - $20,000 = $55,000 maximum price

Bonus: Good area near good schools or hospital

Bonus: Extra square footage to add additional bedroom etc… to add value

Bonus: Unfinished basement or other area for opportunity to add value

Preferred Areas Ranked:

1. Kansas City Northland Area
2. Liberty and Lee’s Summit Area
   1. Liberty Area
   2. Lee’s Summit
3. Midtown and Plaza Area
4. Independence, Raytown and Grandview Area
   1. Independence
   2. Raytown and Grandview

[Keith Amado]

I’m new to exploring the KC market as well. I’ve been actively looking for properties and submitting offers and can confirm that it is a competitive market. If there is anything out there that can achieve the 1% rule and is in a decent area, you can be assured you won’t be the only person submitting an offer on it. With that said, your desire for >$100 should certainly be achievable. 

Best of luck!