All Forum Posts by: Chris Dawson

@Account Closed it depends on the cross street.  E 30th and Holmes is actually a good area because it is right next to Union Hill and only a couple of blocks from Hospital Hill.  Mostly Class B & C (partly due to age of the properties).   The few remaining D properties are quickly being scooped up and converted into Cs and Bs.

Now, if you are looking at E 30th and say Olive St, then you would be looking at Class F or maybe even class Z!  

A good, GENERAL rule of thumb for investors:  West of Troost Ave. is good.  East of Troost Ave. is not so good.

@Gianni Laverde, multi family properties are red hot in KC as they are in many markets across the US.  As a result, it is becoming a lot harder to find a good deal on multi family properties.  There are plenty of smaller multi units (4-12 unit) still available, but the majority of them are in need of major repairs and/or they are in bad areas of the city.  If you can find one of these priced right in a good neighborhood, it should make for a great investment.  It is much harder now to find a good deal on the larger multi units.  There is a lot of out of town money coming in and scooping up these larger projects.

There are pluses and minuses with multi family just like there are with SFRs.  My advise to out of town investors has always been to diversify.  There is no need to choose one over the other.  Base your decision more on the numbers and don't worry as much about what type of property it is.

Here are my random thoughts/recommendations for multi units vs SFRs:

• For multi units, stick with studios. 1bed, or 2bed units.  Most people looking to rent 3 or more bedrooms prefer a yard which means your pool of potential renters will be smaller.
• For SFRs stick with 3 or more bedrooms.  Most people who are looking to rent only 1 or 2 bedrooms prefer no maintenance places like apartments.
• In general, a 6 plex should be less maintenance and upkeep than 6 separate houses.  Your PM fees will also be less per unit for a multi unit vs single family.
• Tenants in multi unit buildings share walls so there is always the potential for noise complaints and neighbors that simply can't get along with each other.
• If you run into financial difficulties, it is much easier to sell off one or two SFRs than it is to sell one big multi unit.
• Traditional lending is much easier right now for SFRs vs multi units.  However, you can get way more creative with financing on commercial properties than you can with SFRs.
• Do not buy a multi family in the worst parts of the city!  The only time I have ever seen an investor even be remotely successful with one of these situations was when they were here locally, on the ground, doing their own maintenance, managing, and leasing.  The one exception to this could be if the property is government subsidized in some way, such as HUD housing or maybe if a TIF is involved.
• How much money do you have to invest?  If you have less than say, $500,000, I would probably recommend buying as many $80k-$10k houses as you can.  If you have more than $500k, I would start thinking about buying multi family.  If you have over $1m to invest, I would definitely be looking for a multi unit building.

I hope this helps!  Good luck investing!

@Sam Smith, you are correct.  Prices are rising in Kansas City.  They are also rising in every other market as well.  What makes KC and other midwest cities such good places to invest for cash flow, is that our price increases and decreases are much more gradual than they are on the coasts AND our rental rates more closely match those price increases and decreases.  You may be paying more today for a property than you would have 3 years ago, but you will also get more rent now.

@Kevin Hurleywelcome to BP! Make sure you look into local investment clubs to get started on networking and further your education. MAREI.org is probably the biggest and in my opinion one of the best REI clubs in Kansas City. There are lots of other smaller ones that are very good too. They meet weekly on Wed, mornings.

Let me know if you need any help getting started.

@William S., its hard to argue with @Mike D'Arrigonumbers.  Investors are always suppose to be numbers people.  However, its sometimes easier said than done!  I think your inability to choose comes more from your fear of starting than from your fear of choosing the wrong market.

There is money to be made in both cities.  That's really not an issue.  I think long term you already know KC is the best market for YOU to invest in because of the numbers and because of your family ties to KC.  

My question for you is: Why must it be only one city or the other?

Why not do your first deal in Milwaukee to learn the ropes so you can be on site in 30 minutes if something goes wrong?  Get the first time mistakes out of the way with a local property (or 2 or 3) and THEN you can start looking for your long term investments in Kansas City.

If I was given a million dollars, the first thing I would NOT do is quit my job.  Even in the midwest, $1m isn't enough to live on; unless maybe if you are in your 90s and in bad health....

I would continue to work as if I never received the money and I would invest all of it in real estate in Kansas City.  Specifically, I would look to invest it in 2 different redevelopment projects (just in case one fails).  Mixed use/commercial/retail.  2 years ago, I would have invested it in a multi family redevelopment but that market is quickly becoming saturated.

@Christopher Griffin lots of good advice here.  I would stress the importance of choosing your team on the ground.  You need to meet with (in person) at least 3 different PMs, 3 different real estate agents (who only specialize in working with investors), and 3 different GCs.  Do your homework when checking out these team members.  Ask for references.  Call the local real estate commissions and the local realtor associations.  Verify that your contractors are licensed and bonded.  Check the BBB, Yelp, and Angie's List.

Everyone knows that "you make your money when you buy" but most people don't realize that "you lose your money when you don't have the right team on the ground".

Good luck! 

Thanks Drew!  I should add that this information doesn't come from some official website or some report published by a big company.  This comes from my personal experience over the past 12 years of buying and selling my own investment properties as well as helping a countless number of other investors buy and sell properties.

I would be very interested to hear about anybody else's experiences with these zip codes.

One of the questions I get asked a lot by investors who want to invest in Kansas City is, "What zip codes are good to invest in?".  Any seasoned investor will tell you that this depends on several factors such as: amount of money to invest, type of tenants, level of risk, and investment strategy.  

In an effort to help those who are not familiar with Kansas City but are interested or looking into investing in Kansas City, I have put together a very general overview of the zip codes in and around Kansas City, MO.  These are all on the Missouri side, not the Kansas side.

Keep in mind, this is a general overview meant to help guide those who are not familiar with Kansas City.  There can be good investments in areas I have labeled bad and there could be bad investments in areas that I have labeled good.

Here is the list:

Highest risk, highest crime, highest turnover areas:

64130 – listed in 2009 as the “murder factory” of Kansas City - avoid

64129 - avoid

64128 - avoid

64127 - avoid

64126 – avoid

Historic NE areas:

64124 – both good and bad areas for renting

64123 – both good and bad areas for renting

KC Downtown:

64106 – mostly commercial & condos – great area for rentals and flips

64108 – mostly commercial & condos – great area for rentals and flips

Midtown:

64109 – both good and bad areas for rentals

64110 – both good and bad areas for rentals

Westport/Plaza/Waldo/Brookside area:

64111 – great area for rentals and flips

64112 – great area for rentals and flips

64113 – great area for rentals and flips

64114 – great area for rentals and flips

South KC/Grandview/Raytown area:

64030 – mostly good rental area

64134 – mostly good rental area

64136 – mostly good rental area

64139 – mostly good rental area

64138 – mostly good rental area

Lee’s summit Area:

64081 – great area for rentals and flips

64082 – great area for rentals and flips

Blue Springs Area:

64015 – good area for rentals and flips

64014 – good area for rentals and flips

Independence Area:

64052 – mostly bad rental area

64053 – mostly bad rental area

64055 – mostly good rental area

64050 – mostly good rental area

64056 – mostly good rental area

64057 – mostly good rental area

North of the River Areas:

64116 – mostly good rental area

64117 – mostly good rental area

64118 – good rental area

64119 – good rental area

64151 – great area for rentals and flips

64152 – great area for rentals and flips

64153 – great area for rentals and flips

64154 – great area for rentals and flips

64155 – great area for rentals and flips

64157 – great area for rentals and flips

64158 – great area for rentals and flips

64068 – great area for rentals and flips

I hope this can help some of you new investors and maybe some seasoned investors as well.

@Julie Macd what part of Italy do you live in?  I have a client who lives in Malta who is investing in the KC market.  We provide real estate sales, property management, and construction services for investors.  Send me a PM for more details.