What's considered "normal" repairs for SFR'S in KCMO?

[Kim Wagner]

Hi - I'm a new investor with my first home under contact.  It's a 100-year-old home located in the urban core (64130 - Blue Hills) of Kansas City.  I am purchasing it from out-of-state as a LTR.  After inspection this week, the report showed issues with water intrusion in multiple areas throughout the house - chimney, foundation, siding, yard due to poor slope, etc.,: "rolling" foundation walls; possible exposed asbestos in a small area that could cause it to be vented into the house through the HVAC and possible mold due to all the moisture.  There were many other issues as well, but these were the bigger ones.  My realtor says this is all pretty typical for Kansas City and that she wouldn't repair or have any of it explored further (a foundation person said he thought the foundation and structure of the home were okay and no repairs were needed).  In  your experience in KCMO, is it accurate that these types of issues are relatively common?  Any thoughts or advice? Thanks in advance.

[Marian Smith]

why do you care if these issues/defects are common or typical whether in KC or on the moon?  Do you want to buy a house with these moisture problem and 1) either fix them or 2) let them continue?.  It is possible the house will deteriorate more slowly than it will take you to earn your equity back out and that renters are used to these issues in rental properties in the area and accept them so you will have no problem getting tenants.  Maybe thats what your realtor is thinking when saying not to explore further.  Water is a buildings worse enemy but the damage is wreaked over time, sometimes a long time.  But the costs to repair go up as the damage becomes more extensive.  Roof leaks in particular because they can cause damage top to bottom.

[Katherine Wiltse]

Hi Kim, my name is Katherine and I have recently moved from California to Missouri. The crazy condition of homes is definitely a MO trademark. It can work in your favor, if you are getting a really low price and think you could Brrrr it. Then you are looking at an infinite return vecause you can get all your money out with the refinance. My husband and I just pulled the plug on a home we were going to buy that had foundation problems. It was too much, we are too inexperienced and the closest foundation repair team was an hour and a half away. I think you should start crunching numbers and estimate your rehab and see if it could work as a brrrr. I hope it goes well, or you find the right home soon.

[Darius Ogloza]

There is no way to invest out of area correctly other than to actually visit the property.  What may look catastrophic on paper may in fact be manageable and what may look like a cream puff on paper could in fact be money pit that makes Butte's famous Pit seem shallow.  No matter what you may read or hear from others, real estate investment is not an arm chair activity like, say, buying a bond.  Get out there, look over the property, consult at least two knowledgeable persons that you pay to consult with you and then get out the pencil and see it the investment makes sense in light of necessary repairs.   

[Garett Weber]

Quote from @Kim Wagner:

Hi - I'm a new investor with my first home under contact.  It's a 100-year-old home located in the urban core (64130 - Blue Hills) of Kansas City.  I am purchasing it from out-of-state as a LTR.  After inspection this week, the report showed issues with water intrusion in multiple areas throughout the house - chimney, foundation, siding, yard due to poor slope, etc.,: "rolling" foundation walls; possible exposed asbestos in a small area that could cause it to be vented into the house through the HVAC and possible mold due to all the moisture.  There were many other issues as well, but these were the bigger ones.  My realtor says this is all pretty typical for Kansas City and that she wouldn't repair or have any of it explored further (a foundation person said he thought the foundation and structure of the home were okay and no repairs were needed).  In  your experience in KCMO, is it accurate that these types of issues are relatively common?  Any thoughts or advice? Thanks in advance.

 Yes....pretty common issues here in KC and especially foundation work in the Blue Hills area. Inspection reports can certainly make those items out to be more of an issue than they really are, but if this is your first property I would be cautious about a realtor telling you to ignore the report. Plenty of good realtors who know what they are talking about (hopefully the case here), and also plenty of bad ones who don't know what they are talking about.

I personally would want that mold / asbestos checked out for liability purposes. Pretty easy (and inexpensive) to get a structural engineer/foundation company to officially sign off on the foundation-- as opposed to a verbal "okay". And most foundation remedies aren't as scary or expensive as people make them out to be, if it turns out to need some work.

[Luther Wilson III]

@Kim Wagner, please tell me you walked away from that deal, no?   The older homes in Kansas City can be a doozy…  Plus, 64130 is one of the worst parts of town - just my opinion.

So many investors get caught up in the same vicious cycle… They look for cheap properties on the MLS or open market with their realtor or perhaps on their own and then end up buying older homes in the inner city. Usually the realtor has no liability and has little to lose by encouraging their client or buyer to execute on a "bottom of the barrel" type of deal. The investor usually ends up paying more than is advisable. Whether the realtor knows all of this or not is something to consider as well…

Next thing you know the investor is under water from the very start and they don’t even realize it…  Yet.  The same investor cycles through a couple tenants, a few property managers, gets swindled by a couple of contractors and whenever they do try to exit the property - that’s when they realize they can’t escape for more than what they have tied up in the property.

Now things can get even more interesting - while the investor contemplates their next move, their property is vacant and then gets ran through - thieves and vandals step in. Now that same investor has a choice to make - do they try to salvage what they have or do they get rid of the property and take the hit financially? I could continue the story but I imagine most of you can picture what happens next.

Location is still the #1 thing yet so many investors fumble the bag when it comes to this…  If you’re gonna pay more than is advisable at least do so in a solid location.

Kim, might I ask why you really want to invest here and what are you really trying to accomplish?