Kansas City, Missouri, has become a hotspot for real estate investors in recent years. With its affordable housing market and growing economy, many investors are looking to purchase and rehab single-family homes (SFH) in the area. In this blog post, we will take a closer look at one such investment and calculate its return on investment (ROI).

The subject property was purchased on market in Kansas City for $172,500. The property required some rehab work, which cost $10,000. Carpet, backdoor replacement, and window glass replacement. Additionally, the investor incurred $500 in carrying costs. The total investment in the property was $181,500. Because of the repairs needed, this limited the number of buyers for this particle property.

After rehabbing the property, the investor sold it for $215,000. The property was placed under contract for 1 day on market, with a 45 day close. Total hold time was 90 days. The investor paid $15,050 in closing costs/commission. The property was sold without any financial concessions.

With these numbers in mind, let's calculate the ROI of the investment. First, we'll calculate the gross income, which is the total revenue generated from the sale of the property:

Gross Income = Sale Price - Closing Costs Gross Income = $215,000 - $15,050 Gross Income = $199,950

Next, we'll calculate the net income, which takes into account the total investment and all associated costs:

Net Income = Gross Income - Total Investment Net Income = $199,950 - $181,500 Net Income = $18,450

Finally, we'll calculate the ROI as a percentage:

ROI =($18,450 / $181,500) x 100 ROI = 10.16%

IRR= 47%

The ROI for this investment is 10.16%. This is a solid return on investment, especially considering the relatively short timeline of the investment (90 days) and the fact that the property was sold without any financial concessions. It's clear that there is still a high demand for affordable SFH in Kansas City that may need minor repairs, and this investment is a great example of how investors can capitalize on that demand.

In conclusion, investing in real estate can be a great way to generate income and build wealth, and Kansas City is a great market for those looking to invest in affordable SFH.

Kansas City, Kansas

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