All Forum Posts by: Kathy Batesel

Agreed.... JoCo is good for flipping properties more than locating rentals, in my opinion.

I'm probably not educated enough to give a great answer, but I do have some thoughts on the matter.

I think history is the best teacher for some things. The economy is one of those things because of its somewhat cyclical nature. My answer is based on my exposure to real estate stats and limited education on economics.

I think future interest rates are going to increase in the coming 3-4 years, although I cannot predict how much. I also think housing prices, which have stabilized a bit, are going to slowly increase. I'm aware that from the time the National Association of Realtors first started tracking sales price increases/losses on a national basis, there had never been a loss until the housing bubble burst around 2007-2008.

I have gone back to try to find the information because I can't remember exactly when they started tracking, and I did not see any updates including the price drops we've seen, but was unable to find the information I wanted. I believe the tracking started in the mid 1930s. I remember that 1/2% was the smallest growth increment, with another year at 1%, but that 2-3% annual growth was a steady, reliable norm for all the years till 2004. Another consideration is how the market behaved when interest rates were in the double digits during the 1980s.

When I look at these factors together, my personal conclusion is that we could see interest rates creep back toward 8% pretty easily as our market stabilizes and growth continues. If today's buyer found loans at say 4%, that can be a great tactic for commanding a higher price if he can let someone assume the loan (refer to the terms of the note to make sure it's assumable!)

In sum, I guess what I'm getting at is that if you factor correctly, you can make money either way.

I have to agree with Callum.

I'd encourage Wendy to read Robert Kiyosaki's "Guide to Investing" as a solid starting point. He discusses exactly why the question Wendy posted can lead to big losses and victimization.

He goes on to discuss that instead of asking "What should I invest in?" a person should first have a plan for what their investments are going to do for them and why they need that plan.

I'm a lot more familiar with the KCK area (Wyandotte, Johnson, and Leavenworth counties) than I am with KCMO, but I can attest to what David Welsh said about the challenges of finding the good vs. bad areas.

I've found some great rental potential in the KCK area and own two rentals there. I purchased one for $15k, spent $5k or so getting it livable (doing HVAC install ourselves) as former owner's daughter stripped it of copper etc. when mom died, and I keep it rented for $700. Its resale value now is about $40k. Other one I bought for $48k, lived there for a little over a year while fixing it up, and keep rented for $750 now (to family... its market rent should be more like $950.) Its market value is about $80-90k after upgrades.

Area selection is super important to values here. The same exact property just a mile or two away can be worth far more or less.

The other thing to know is that there's a LOT of competition for these houses.

I've been disappointed by many of Yun's statements since I became a Realtor. I've found that discussing real estate is much like discussing the economy - you can create a truth and make it sound legitimate because there's so much conflicting information.

I'm working with a woman right now who has placed 4 offers on houses. She's looking for a house for herself to live in, not to resell. The first offer she made was a full price offer and she was beat out by $400. We made the offer the first day the house was on the market. The second and third offers she made weren't full priced offers, and had been on the market 8-10 days. She got beat out. She probably did. But her latest offer was $20k over the $55k asking price and guess what? Yep... Got an e-mail saying she got a better offer.

Shortly before I inactivated my license, I went through the same thing with another buyer. Took 6 offers for her.

In many of these instances, but not all, it was investors that beat them out. So yes, there's truth to Yun's statements.

On the other hand, houses that are priced competitively with the retail prices of other houses don't sell as quickly and see such huge price differences between the asking/sold price because sure enough, they're not attracting the investors.

So in my opinion, the investors *are* dominating the foreclosure market, but not the retail market.

What I have done with my investors was cultivate relationships that let me find them great buys that they could turn around and resell. If they find their own buyer, they had me complete the paperwork and paid me a 3% commission. If they simply flipped the property, I charge a 5-6% commission when I listed it.

I found that if I can make an investor money by spotting opportunities and easing his/her job, they'll pay me because they still end up making more than they would without me.

I've only had a couple of investment purchases so far, and have had mostly good tenants in my properties. I had one "semi-professional" squatter that took me about 8 months to get out, and I got a judgment against him for what it's worth - no way to collect on it.

But I have to say, if I was in a situation like the one you're in, I'd be asking myself a lot of "what if" questions:

- What if I broke in when they weren't home and changed the locks?
- What if the house became uninhabitable because of broken windows?
- What if I spent my money on an attorney to fight criminal charges instead of civil ones?

I'd recommend talking to a construction company that specializes in remodels and getting estimates on having the work done compared to building new, and discussing those options with a Realtor to see what kind of sales you might see.

I liked Conti & Finkel's book, as well as the Rich Dad series. I've read a number of books on conducting home inspections, too.

I know I read the Millionaire Real Estate Investor, but not sure what I read in it at this point.

I feel like I need to read more on financials and tax law, though.

Thanks, everyone.

Jon, I live about six minutes from the Ren Fest. Maybe we've crossed paths - or will!