All Forum Posts by: Kyle Wells

Thanks Jennifer! I would be lying if I said I'm not a little nervous about being 1,800 miles from my investment properties. Fortunately, I have quite a few strong connections in the Kansad City area and will likely visit once a year for work (and will make it a priority to drive by/visit the properties). 

What are you looking at equity wise in the property? Any bank will likely require an appraisal to determine current MV to calculate the equity you have to borrow against. Can you provide more info like what comparable houses are selling for and if it's owned outright or if there is a mortgage? 

You need to analyze as if you're not managing or doing work yourself.  As you may not want to do this for several properties if/when you scale up your portfolio. Even if you do own maintenance you're not getting paint, flooring, appliances, roof, etc. for free. I would see what the net income looks like and offer to get the return on your investment you require. 

 Thanks Cyndi and good luck in your search!

There are a couple of duplexes out there right now, but not seeing much as far as 4plexes go. We used Andy Kogan with Remax as our realtor. He actually manages our 4plex as well (I self manage our SFR). Full disclosure, we had a rough patch with Andy at first due to rehab process taking longer than expected as his initial handyman recommendation didn't go well (Andy ended up firing him), but things have been much smoother since as the new handyman gets the job done timely at a fair price.

It can definitely be a bit overwhelming investing out of state. I actually relocated from the Seattle area to Kansas City for work for a couple of years (moving back to Seattle in a couple of weeks as my wife and I are expecting our first child in 12 weeks), so it allowed us to view properties in person. There are definitely deals to be had, but they don't last. I do not self manage the 4plex. My realtor actually manages properties as well, but there have been a couple of rough patches as the rehab process on a couple of units took too long given the scope of the project and put him trying to find tenants in dead of winter, which took 1.5-2 months to fill the two units effective March 1. Now things are running much more smoothly. 

My 4plex is in 66103. Technically in Kansas City, KS, but just a mile or so from Westport area and less than that from KU Med Center. There are quite a few 4plexes in the area. 

Patience is the hardest part of property investing, but it's important to remember that no deal is better than a bad deal. Sometimes you just have to walk away. Just make sure the numbers work when you decide to pull the trigger. It can be easy to be too optimistic in your projections when trying to make that first deal. It took me 3-4 months in Kansas City to find my first deal that had the right combination of location and cash flow. You'll find it, just continue to be proactive and make sure you have an agent that understands your goals. 

What I've seen is the below:

-They will loan about 85% of purchase price + rehab costs (caveat is loan to after repair value cannot fall below 70%)

-Interest rate of around 10-13% (add a percent if you want deferred loan and interest payback to end of project vs. making monthly payments)

-Expect to pay about 3-5 points in loan origination fees

-Expect to front rehab costs and receive reimbursements as you go based on regular inspections of work completed

Once you have closed on 3-4 deals or more, rates will drop. If you are very experienced (20+ deals), you could perhaps get interest rates as low as 7%. Hope this helps.

 I moved from the Greater Seattle Area to Kansas City for 2 yrs for work. Now I'm moving back to the Seattle Area, but will continue to hold the Kansas City properties. It's a good area to cash flow and is still a city that many gravitate to from the midwest.