All Forum Posts by: Lee Ripma

@Dax Nollenberger

Great helpful and insightful post! 

Love what @Brad S. had to say! I’ll add that I lived in CA and saved 25k from my W2 and bought my first every property out of state. Get clear on your goals, then take action. Knowing everything is not nearly as important as taking action. 

I was like you 5 years ago, I started with out of state BRRRR on small MF. I then realized that stabalized value add MF had a much more favorable risk/return profile. I talk about this in more detail on my podcast, 373. So while others are saying hey this market I'm going to tell you rethink your strategy! I was successful doing the out of state BRRRs by the way but I still pivoted to stabalized value add.

My issue with your guide it is geared toward SFH homeowners. I personally live in an A+ area with only SFH, well rated schools, and near zero rentals. The rent to price ratio makes zero sense for investors, so we don't buy investment property here but we live here.

Most investors will invest in B+ to D neighborhoods. From my experience the median household incomes really determines  the neighborhood class but I also look at all the VestMap.com DISCERN factors. In KC I'm using the following splits in general with local knowledge of demographics, schools, crime, growth, and rent levels. 

I am only including B+ to D zip codes below and they are broken out by where that zip code is located so it isn’t just a string of meaningless zip codes. 

Instead of finding exact locations I recommend finding several locations that will work and picking the class you want. Then evaluate each available deal. No use having a location without a deal you can buy! 

General income splits: 

A 99k+

B+ 75k - 99k

B 56k - 75k

B-/C+ 48k - 56k

C 28k - 48k

D under 28k

Guide to Kansas City Zip codes

B+ zips

Blue Springs

64015

64014

Grain Valley

64029

Lee’s Summit

64068

64063

64081

Raymore

64083

Kansas City, MO

64145

64112

64101

Liberty

64158

Northland

64152

64151

64154

64155

Shawnee Mission

66217

66216

66219

66215

66210

Olathe

66026

66061

Prairie Village

66205

Gardner

66030

B zips

Kansas City, MO

64105

64114

64111

64137

64138

64108

64111

64131

64110

Independence:

64055

64056

64057

North Kansas City

64119

Overland Park/Merriam

66202

66203

66204

66214

66212

66214

B - /C+ zips

Gladstone

64118

North Kansas City

64116

64117

Independence:

64052

Raytown

64133

Grandview

64030

Belton

64012

Kansas City, KS

66112

66106

C zips

Historic Northeast:

64124

64123

Kansas City, MO

64129

64130

64109

64132

64134

Independence:

64053

64054

64050

Kansas City, KS

66102

66103

66104

66105

Riverside

64150

D zips

Kansas City, MO

64125

64126

64127

64128

Kansas City, KS

66101

I do this using VestMap's ZipFinder feature. 

All real estate is local. However, it's important to be able to narrow down general areas where you would buy or not buy. I don't find neighborhood scout data to be very useful and instead I will use VestMap's zipfinder to narrow things now, but keep in mind you need vet EACH location you're buying in. To me crime is not that large of a factor in determining what is B class. The largest factor I look at is median household income followed by median home value. For Huntsville see VestMap's zip finder map below. You'll see on the side where the criteria are. I would guess these are B class zip codes based on income and home values. However, always vet each property location

. I do this using VestMap's DISCERN reports. 

@Derek Elliott

I was in your shoes 5 years ago, now I’ve got a nice portfolio and left the W2 behind. Take a listen to 373. On market selection I would argue that you don’t have that many to choose from if you want cash flow and population growth. I think the goal is really to find stable to growing affordable submarkets. I use VestMap.com’s zipfinder feature now that I know what I’m looking for. Before that I just googled and bought! (I talk about this in the episode). 

@George Red

Great idea! I was an out of state investor for years in KC from CA (San Diego and then LA). When the pandemic hit I couldn’t take CA anymore, so I moved to KC! If you do this via zoom would love to join.