All Forum Posts by: Jim Kilian

Hello All,

My wife and I got into the real estate game without quite realizing it. She found a great 3300sqft + 1400sqft unfinished basement foreclosure for $115,000 back in 2013. Just the 2 of us in a 5bdrm house. Stayed there 2.5 years and then decided to sell. After all expenses considered we walked away with about $80k. Paid off some student loans and a car, with the rest we thought we'd try again. Market was overpriced so we looked for about 4mo, ended up finding a dilapidated duplex, actually was the 1 we rented prior to buying our house. Owner had moved and wanted to sell, got it at about 60% ARV. Tenants in place, weren't sure which to kick out. 1 decided they didnt want to pay the new landlord rent so it made that decision easy. Spent 2 mo kicking them out. Left us, literally a garage full of junk and a completly trashed house, 2 large dump container to get it all out. On top of that, cops were called multiple times in that period due to the live in son of the tenant being drunk and abusive. He finally took a swing at the cop and was arrested (after the 3rd call that day), mom was out the next day. Spent 3 months rehabbing and finally moved in. Been in there a year now and want to go find another here in Olathe. Am I crazy? I'm a recruiter and my wife is a real estate agent.

That is a pretty tight deal, under $50/door. Is there room for rent increase? Are you moving into one of the units?

In my opinion the market is overinflated in KC right now. You will want to find a foreclosure you can put some sweat equity into. The numbers don't work at retail value. $200k home means you need to rent for $4k/m at 2% rule. That isnt happening, most 3bd or 4bd houses here right now are renting for $1200-1600/m depending on what area of Joco you are in. 

For dealing with pricing, I look at assessed county value, compare similar rental comps and then evaluate condition of property. I won't pay above assessed value and I look for above 2% rule when doing calculations. I'm aiming at below $200k looking for duplex, triplex, or quad. Would really like a quad but that will probably be $300k+. To some degree I'm waiting for the bubble to pop again.

That is asking for trouble and I would turn him in with any physical evidence you have. Emails letters, text messages

If you try to raise rents by $200/month your tenants will flip. That is an unreasonable jump. Zillow is also not always accurate so check craigslist and call some for rent signs in your area to see what they are going for.  You can't usually raise rent on an existing lease unless it is month to month. If you have good tenants and want to keep I'd open a dialouge. Hey, your lease is coming up in X. We will be raising rent by Y (I recommend  not more than $50/m or so, people don't usually have a ton of wiggle room). Do you think you will be signing on for another year at that rate? If not, start advertising for the full market rate and let the current tenant know to start expecting showings 30 days from end of contract. If you don't like the tenants then tell them straight up its going to market rate as soon as their contract ends and they need to decide if they will be signing on again or not in the next X days.

We are doing the same Victoria, just looked at one that was deplorable off of Ridgeview and Harold. Overpriced but apparently got multiple offers. I think its a waiting game right now. Prices are just really high for this area. And I won't go downtown KC even woth 20k houses. Too many headaches.

Potentially, just need to talk with a bank about it, they can outline requirements. Have you been in your current one over a year?

This all depends on your risk tolerance. Think about 2007-08, when unemployment was 10%. People couldn't pay their rent so property owners were losing their shirts. All of this theory is great in a booming economy and if you are ok with the risk, go for it. But over the next 30 years there will be several market drops and possibly another major recession, if you use history as an example. So just keep that in mind when you leverage these assets. 

My focus, as I get into this is to buy 3- duplex/triplex/4plex's, take profit and pay down my personal residence til its free and clear. I'll buy another and then pay off the first unit and so on, maintaining 3-4 loans at a time. Its a long game and not as profitable as a lot of these investors but I can ride out dips, cut my rent to keep good tenants if need be and continue buying in a lousy market, so on the rebound I come out way ahead.

Hello I am new to real estate investing / bigger pockets. I love the page so thought I would attempt to get more information. Recently I found a Sheriff courthouse auction for a home in KS that has a 1st foreclosing on it and in the documents it lists that there is a HELOC also attached to the property in the amount of 75k in 2nd. My question is if the first sells for $30K will the second fall off or be satisfied as far as I am concerned as the new owner? In KS what is some advice / warnings you can think of that could help me approach this new purchase avenue with caution and knowledge??

THANK YOU<