Kansas City Property Management?

Question

Hey I've seen some folks asking for suggestions for property management already but figured that I'd start another thread on this and see if there are any other suggestions out there?  Specifically I would love to get a company that has some rentals or specializes in Section 8.  Especially with all of the new laws around it with the passing of the ballot measure last Nov.  Any suggestions appreciated for where to look and I'm an out of state investor if that helps.  Thanks!

Luther Wilson III · Answer

Hey, @Adam Sankowski, great question.  It might not ever grow old in KC...  Kansas City is very spotty and can be an absolute beast of an animal when you're dealing with PM's, contractors and investment properties.   I live, work, and play in KCMO and I've worked with a lot of different investors and sadly, I've seen and heard the same problems over and over again.  It's pretty much forced me to completely change my strategy for investing and working with other investors who own property here.  I've been the managing broker for a couple different property management companies here over the last 3 years and it's been quite a journey.  Most of our clients are out of state investors and the two biggest problems they face is dealing with property managers & contractors.  I thought I was pretty intelligent and figured starting a brokerage to really try and help investors get a better handle on those two issues in particular was a good idea.  Little did I know. LOL.  The first-hand experience has been absolutely incredible but I wouldn't wish it upon my worst enemy.  It has certainly helped me learn what NOT to do LOL.  I'd be happy to share some of the experiences here if anyone wants to PM or call me about it.  Nonetheless, no one can take away the knowledge, wisdom, & experience that has been gained.

All this being said, KC CAN be an amazingly good place to invest in real estate so long as you follow the #1 Rule:  LOCATION, LOCATION, LOCATION  :)  And beyond that, having a good overall STRATEGY for your marketing & investing that has MULTIPLE EXIT STRATEGIES for any particular deal.

The low income areas seem to get the most draw because people see the low costs and high potential returns.  All that becomes bunk if you don't know what you're doing, who you've hired, or even walked through the property you just bought.  Odds are you'll fail.  I've helped quite a few investors acquire, rehab and manage several properties in KC over the last 6 years and virtually all of them who did this with low-end, inner city properties have failed HORRIBLY.

I truly believe there is "sweet spot" for good buy & hold SFR deals in & around KC.  If you stay in certain locations and get great deals in those areas then odds are you will win and actually be profitable.  Despite whether it's a turnkey that's being served up on a silver platter for the investor or if they start from scratch with and REO and then go from there building their own team of sorts for the contracting & management then the odds of succeeding are much higher.  I'd be happy to discuss with anyone here about that "sweet spot" here in Kansas City.  :)

Adam Sankowski · Answer

@David Kuhlke Hey sorry I actually don't have really good info about KC at all even though I own a house there.  When I started I pulled out my retirement to invest so I had a chunk and could get 2-3 houses right off the bat.  I wanted to see what it was like buying turnkey vs getting a good realtor and buying off the MLS and doing it yourself.  KC had a bunch of decent looking Turnkey companies and was really the only city I saw that had increasing population (no offense Cleveland but that's not where you want to be) and ok looking turnkey.  I really liked Indy as well and found a bomb realtor and PM there.  So I bought houses in both markets and I'm sticking with Indy now.

Have you visited KC?  Its ok but when you say "B neighborhoods" I found it really hard to tell what was what there.  To me, and I'm sure a KC local will completely disagree, the neighborhood layout didn't make sense.  Like in Indy you have a central downtown and then the better neighborhoods spiral out from there. Totally logical.  But in KC you have "the Paseo" and Troost.  And its cool on one side of it and sketchy on the other.  The city felt very "arbitrarily segregated" to me.  I visited it and also, no disrespect, but it didn't hold up to the "Millennial test"- there was a real lack of bike lanes and easy of transportation.  Indy on the other hand has an amazing network.  So Indy it is for me.  I still have this KC "turnkey" house that I'm going to sit on but I'm not buying there anymore.  Sorry I wish I could be more of a help.

There are a ton of KC investors on here so just post up a forum question or honestly you could follow the Turnkeys and where they invest even if you don't want to use them.  Check out a few and see what neighborhoods they are in.  They usually stick to just B neighborhoods- especially Bridge from KC- so stalk them and just buy next to where they do :)  Hope this helps?  I'm sure KC is cool and its a solid city with an increasing population, which is why I went there anyways, but for my money Indy is up and coming, has cash flow and appreciation, and its where I just seem to understand the city and the layout makes sense to me.

Matt Altrich · Answer

Hi @Adam Sankowski,

I'm a fellow Bostonian that is now living and investing in the KC market.  I personally agree with @Luther Wilson III regarding location and I invest mainly in A class areas.  I think I'm in the minority though as most people (esp. out of state investors) are chasing the returns they see on paper of the lower class properties (C/D).  There aren't any free lunches in this world and you often pay for what you get.  Those lower priced homes are sometimes profitable but often come with higher maintenance/expenses due to the tenants you're attracting.  With this said, some investors specialize in this market but it's not for me.  I'm in this for the long-haul and want the absoloute best investments I can afford that will cashflow and (hopefully) appreciate.  No, I won't be be able to scale to 100+ A class doors but that is not my investment strategy either.  @Jake Riordan mentioned Raytown and a few other areas that appear to be a good compromise for someone wanting a good cash-flowing property in a C neighborhood.  I can't personally speak to these areas but I know they are popular for local investors.

Luther, we need to meetup sometime and chat real estate.  Shoot me a PM and we can get something on the books.

Jake Riordan · Answer

I'm in KC & prefer the C multifams since they CF the best from what I've seen & experienced.  If you prefer Indy, then by all means stick with that as getting too many places to invest in can be a bit much.  Better to start out with 1 market & be the expert there & then slowly build knowledge...  Downtown KC is pretty central & has lots going for it - streetcar, lots of people moving there, arts, etc.  As a single investor, not sure I'd invest there though as it can be pricey.  You are somewhat right as you have to somewhat pick & choose areas going out from DT.

Not sure you're in the right spot for B neighborhoods.  As the areas you're talking about are probably more C ish. If you want SFs, then Raytown, KCK, Grandview & others are good spots, although not necessarily 'cool' areas. If you want to be in KC, I'd find a few areas you want to be in & then find the best house in that area that meets your criteria.  Just using the turnkey companies limits you to their stock. I'm happy to set you up on an auto MLS search if you like & can fill you in further as to different areas.

Kim Tucker · Answer

Some to try

MRE Management with Nick McKinnisHome Rental Services - they do higher end, not Section 8

Adam Sankowski · Answer

Hey Thanks for the suggestion -

@Jake Riordan I'll def. check them out!  Just as I thought Voepel is only taking on people with 5+ properties in their portfolio

Adam Sankowski · Answer

Hey @David Kuhlke I haven't found one yet.  I've also been dragging my feet because my current PM is very so-so (slow to communicate, lots of repair markups in my opinion) but they also get the job done and this is a section 8 property and I feel like not everyone will take them on.  Also I just have one house so that's not exactly a huge motivation for another company to take me on.  I've had many people tell me  though that Voepel Property management is one of the best in KC.  Your post to me actually inspired me to finally reach out to them so thanks... I'll let you know how they respond!

Luther Wilson III · Answer

Well, I've spent most of my life in & around KC and I grew up in the industry so real estate activities & discussion was basically a daily thing for my family and I.   :)

I am still the managing broker for a local PM company and I work closely with contractors & vendors here.  I'd be happy to talk shop with you sometime.  The best way to reach me is by text message or email.

Adam Sankowski · Answer

Hey @Luther

@Luther Wilson III Def sounds like you know what your talking about and I'd def. be interested in talking more about the KC sweet spot in the future.  Maybe I'll give KC another try?  Let's stay in touch.  Do you currently work at a PM or have one that you would recommend?

Jake Riordan · Answer

I use M&M Property Pros on the MO side of KC & Option RE on the KS side.  Both have done a good job for me.

Kansas City Property Management?

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