All Forum Posts by: Kelly Watkins

The books offered by Bigger Pockets on flipping are a great start. 

My first was an online auction. It was pending with a well-above-full-price contract & matching appraisal when another home in the same neighborhood came up for auction probably giving me a little more confidence than the competing bidders. (plus I had my plumber verify I could add a master bath to the 2nd story). The other 2 have been sellers who have contacted me directly w/ unique situations. I am using HML. A local bank has made the process so easy (in-house appraisals, no monthly etc..) that I haven't looked into anything else. Plus, I'm inundated w/ information & decisions as it is right now! 😅

Congrats on your first flip! I finally pulled the trigger on my first in Jan and this week closed on my 4th! I don't have any plans to hold for awhile as right now I am enjoying this process & with houses selling so quickly & above asking I feel it counters the tax consequence a bit. I see your wife is a Realtor so that will help w/ finding deals, knowing your comps & hopefully her company has an investor friendly commission plan. To answer a few of your questions; I know the biggest challenge (aside from finding the deals in this bizarre market!) is hiring good contractors that are available to start asap. I asked for referrals from other Realtors and investors and then got bids from 3 plumbers, electricians, hvac etc on my first flip which help me put together a team I am still using. By quickly buying 3 more homes I have been able to keep them busy & in return they are are putting my jobs first & willing to come look at properties before I bid on auctions or make an offer. Available appliances are limited so don't wait until the last minute on those. 

Hi Abigail, I am licensed. Our KS real estate laws work as described in Nathan G's 3 license scenario. I am not familiar w/ the property management license he mentioned that some states have so I wont speak to that. There are advantages to having your license such as the knowledge you'll gain during the required training (although most will not deal with investment properties), the real estate commission you should be able to save on (at least) one side of every transaction (minus what you owe to your brokerage & E&O insurance) & access to the MLS.

However, there are disadvantages as well. The process to obtain your license takes, all in, about 30 days and approx. $1,500.00. There's additional training and dues required every year to stay active. You then do need to hang your license w/ a brokerage for at least 2 years, go through 45 hours of additional training as Nathan mentioned for your Associated Brokers but in Ks you also need to have 45 sales under your belt. Not easy to do w/ just your own sales. You can just stay a licensed salesperson but you would want to discuss that w/ the brokerages you are considering as each have their own philosophy on investors getting their license just to sale their own properties it seems. I think the most important thing to consider is the higher standard you will be held to once you have your license. You can not just stick a FSBO sign in the yard, you must follow all license laws & make clear you are a licensed agent in all negotiations.

If you are just starting out I would recommend using a Realtor. I know there is a cost involved but their knowledge of the market & the comps, their advice on negotiating an offer & a list price once complete and the advertising they already have in place could actually increase your ROI & would take a load off your shoulders while you cut your teeth on all of the other fun stuff you will encounter along the way!

Hi Nate, 

I would recommend you factor in closing costs just in case you find the perfect home and need to be competitive in making an offer.

 As you may know, the buyer and seller have separate closing costs. The seller is paying 1/2 of the title insurance, 1/2 of the closing fee (the amount charged by the title co. to do the closing), the real estate commission and some filing/recording fees. The buyers costs include the other 1/2 of the title insurance & closing fee, pre-paids which start your escrow account (assuming you are not paying cash), the fee to the lender, appraisal cost and recording/filing fees for the deed. 

For years in Wichita it has been very common for the seller to agree to pay all or part of the buyers costs but with todays very low inventory where houses are selling with multiple offers it will put you at a disadvantage if you are competing. Find a Realtor you trust to help you decide when you may be able to include your buyers costs and when its worth it to come in strong with a clean offer. Hope this helps & good luck! 

Have you consulted a Realtor or looked at comps to see what you could sell the property for right now? The inventory is SO low you may be able to make enough profit to make it worth the tax bill. If you rent for a year it's not uncommon you will then need to do additional rehab to the property as renters can be hard on properties. Since you started your post by saying your intention is to sell I say sell & move onto the next one! =) 

Residential developers in Wichita pass the cost of the neighborhood utilities (sewers, streets etc..) onto the buyer. Each lot is assessed with the taxes to cover such cost and they are paid monthly for the first 15 (give or take) years as part of your mortgage payment. These special taxes, as they are called, are collected the same way as general taxes (December & May) but are listed out separately. If you go to Sedgwick County and search property taxes you can always find this information (https://ssc.sedgwickcounty.org...). These special taxes could potentially add $150 -$250 to your monthly mortgage payment. 

Most lenders want you to have 2 years of steady income to qualify for a mortgage. Lenders will use some college degrees as history towards those 2 years. Debt to income ratio is another important factor lenders look at besides credit score. Maybe your dad can qualify for the first home and put you on the loan to start building credit. I would suggest visiting with a lender to walk you through the process and give you advice. Any mortgage lender will have a phone discussion with you for free. Once you have financing lined up you can find a Realtor who is familiar with investment properties & one who understands your goals. He/she will work to find you a home that meets your needs. Just know in this low inventory market that may take some time. The Realtor is paid through commission that the seller pays at closing so there is no out of pocket costs for you. Hope this helps and good luck! 

Welcome to Wichita Colten! Since you are new to town be sure you are aware of special taxes, i.e specials. They are somewhat unique to Wichita & may throw off your numbers for those new duplexes. Let me know if you want more information.