Here’s an example of a potential investment property that we are encouraging our partners and clients to capitalize on today, right here in the Kansas City market:

6205 Northern Ave, Raytown, MO 64133

MLS #: 2496940

Listing courtesy of Rodrigo Pulido - Chartwell Realty LLC

It's currently listed for $199,000.

The house has 3 bedrooms, 2 bathrooms, a 2-car garage, a full basement and it was built in 1954; Square footage approx. 1,569

Here’s the rub: contrary to popular opinion, you’ll need money to invest in real estate. In order to purchase and maintain the property, cover maintenance and perhaps minor repairs, to cover utilities & other expenses as well as making the mortgage payments and more.

Here’s a breakdown, simply estimates, for what the out-of-pocket costs could be for a investor who uses non-QM investor financing for the purchase; a 30-yr fixed rate loan at 8% interest:

Down Payment (25%): $49,750

Closing Costs (3%): $5,970

Placement Fee: $10,000

Reserves: $5,000

Total estimated cash needed: $70,720

If purchased at list price, your total monthly payment on this investment property, including the escrow for the taxes & insurance:

approximately $1,332.32

Alright, so on the back end, here’s how we make the investment work, for the long term: Do seller financing.

A 10-year lease option is a great way to go if you’re doing a significant volume of purchases. A contract for deed will fly if you’re doing 3 or less per year.

Here's how the cash flow & ROI could look, assuming you do a lease option, as a way to generate cash flow:

Option fee received: $5,000

Monthly lease amount: $1,750

In this scenario you'd have approximately $65,000 tied up in the property "left in the deal".

With monthly cash flow at around $400 month your

ROI: 7+% cash on cash

The cool thing about seller financing is that investors are able to virtually eliminate all of the regular expenses for traditional rentals. That's management, maintenance and more. Along with the headaches and main challenges for landlords.

This is about as close to passive income from real estate investing as it gets. Doing so while enjoying long-term ownership and tax benefits Plus, later on down the road, when the residents exercise their purchase option or if they refinance or resale (depending on how the transaction is structured & handled) you will walk away with a large amount of money. Tap in with me and we can dig deeper into the numbers sometime.

There's only so much I can get to here on a social media post but if you want to learn more about how we're making this happen, connect with me. As the market has shifted there are more investors who are getting on board.

I truly believe this is one of the best ways to invest in residential real estate. Plug in if you want to make it happen or learn more about it.

Luther Wilson III