All Forum Posts by: Nathan Roberts

The top 10 largest employers in Kansas City are the following:

• Federal Government, Cerner Corporation, Children's Mercy Hospitals & Clinics, Internal Revenue Service, City of Kansas City, University of Missouri - Kansas City, Honeywell FM&T, Hallmark Cards Inc, Saint Luke's Hospital of Kansas City, and Burns & McDonnell. Information is provided by the Economic Development Corporation of KC (EDCKC). 

The driving force for population growth is brought on by a multitude of things. This may include, but is not limited to private-public developments, corporations and government entities moving to the city, employers recruiting from outside the metropolitan area, etc. The Kansas City MSA added an estimated 16,100 from November 2018 to November 2019 according to the Bureau of Labor Statistics (BLS). You can learn more by reading this article https://www.bls.gov/regions/mountain-plains/news-release/areaemployment_kansascity.htm. 

When investing out of state you should consider the following metrics: current population, population growth rate, median sell price, median property values, median household income, unemployment percentage, etc. Most realtors/agents should be able to provide market demographics or statistics for their area. With that said, http://worldpopulationreview.com is a great resource for finding out market demographics or statistics. Kansas City is a great market for cash flowing properties; I have investor clients that are getting $150+ in cash flow per unit with no value-add. The information below about KC is either provided by World Population Review, the Kansas City Regional Association of Realtors (KCRAR), or Zillow.

Population: 492k

Population Growth: Year 2015-2016 was 1.38%%; Year 2016-2017 was 1.38%; Year 2017-2018 was 0.75%. KC is the largest city by population in Missouri

Median Household Income: $52k

Median Rent Price: $1,025

Median Sales Price: $200k up 5.3% (KC Metropolitan Statistical Area; Includes 15 counties)

Median Home Value: $157k (Up 4.4% from the previous year according to Zillow)

Housing Supply: 2.3 months worth (seller's market)

These statistics showcase a viable market for real estate investors. There are many areas/neighborhoods that work for building a cash flow portfolio. Let me know if you would like to connect over the phone to discuss further!

Originally posted by @JayCinta Henry:

Please do. As I can't put my finger on how BP calc comes up with TOTAL INITIAL EQUITY being $65,500. My apology if I am slow to get it, I am new to all this, so am clearly a candidate for an EL5 here.

Here is the PDF report link, it should contain everything.

https://www.pdfescape.com/shar...

There's quite some interest on this property. To beat out competition I upped the numbers to see how they would work out, to $110k for purchase price (it's listed at $100k) and another 5k for a total of $30k for repairs. Even with that it seems the numbers are ok. Based on this report would you (or anyone else) think $110k will be ok to offer on this property and it still be a deal? What would your max offer be here? I am looking to buy and rent out.

Thanx for your reply.

EDIT. here is a screenshot of the report  ...

The BP calculator is giving you a total initial equity of $65,500 based on the ARV, not the purchase price. The ARV ($170,000) - the loan amount ($104,500) = Total Initial Equity ($65,500). This is the total equity of the project. Obviously this is an estimation, which is why BP has this amount as the initial equity and not the finalized equity after the project has been completed. $65,500 is your total ownership in the property while the bank will have $104,500 in ownership/equity.

Your question about if a $110k offer price is okay will be based on personal preference. Did the cash on cash return / ROI and cash flow numbers meet your investing criteria? If so, this may be a good offer price. If not, you want to find another property. I personally don't know anything about the area or have any comps so I can't give a recommendation on that either. Check with local realtors and/or investors to see if this is a suitable investment. Like I previously stated, this is based on personal preference so every opinion will be subjective. For example, I have clients that won't take below a 12% ROI with a light rehab while I also have clients that won't do value-add so they are fine with a 8% cash on cash return. Let me know if this helps!

Hi @JayCinta Henry,

Equity is simply the amount of cash in the deal and/or ownership in a property. If the property in your scenario is purchased for $110,000 and you put down $27,500 (75% LTV mortgage) then you have 25% equity in the property. You left off some variable in this post. I would need to know the following to calculate your equity:

• How much is the property currentlyly worth prior to rehab?
• What did you purchase the property for? You said $110,000
• How much was your down payment not including closing cost?
• What is the loan-to-value of the mortgage you recieved?

Your question was "TOTAL INITIAL EQUITY in the report is 65,500. How is this figure arrived at?". Initial equity would be based on the purchase price, not the ARV or when you do a rehab; what is your total equity after the rehab would be a different question. Simply put, the amount of ownership in the property would be your equity. For example, you can buy a property worth $100k for $75k with a 75% LTV mortgage. If the mortgage is based on the $75k purchase price then you will have $43,750 in equity. You automatically have $25k of built in equity when you purchased, then you put down 25% for the property which is $18,750 (25% of $75k). Let me know if this helps. If you need me to make this example more clear, I can do that as well. Talk with you soon!

Best Regards,

Nathan Roberts

Hi @Eric Lawson,

It never hurts to have an agent on your side when acquiring investment properties. Most of them are free of charge with the exception of probably a brokerage administrative or flat fee that is around $300 (when you purchase a property). For the most part, they will find deals on the MLS ie; retail properties, foreclosures, REOs, etc. If you're looking for value-add opportunities, they can be found on the MLS as well. This will depend on what your investing strategy is. Are you flipping houses, BRRRRing, leasing, wholesaling, etc? In my experience, it's easier to find motivated sellers off-market than going through a realtor. With that said, there are still ample opportunities to purchase properties throughout the MLS but that depends on where you're located. Always, always, always be lead generating or marketing no matter how busy you are. I see no reason why you can't connect with a steller agent in your area and focus on being a master marketer. Do Both!

Best Regards,

Nathan Roberts

HI @Matt F.,

When you say bank (singular not plural), I'm assuming you only talked with one bank. In this situation, I would speak with multiple banks unless there is a reason why you would want to refinance with this particular bank. Before I continue, I must say I am not a lender or banker. From my experience working as a realtor with lenders, it shouldn't be difficult to find a lender who does not require both partners for the refinance. This is definitely a better option than both partners signing the refinance, because as you and most people know, you can only have 10 mortgages under your name. By refinancing without your partner, you both could essentially have 20 properties together (10 in your name and 10 in your partner's name). It's very hard for someone to answer your question due to the amount of unknown variables; everyone's situation is different. Long story short, I would recommend connecting with a mortgage broker or talking with multiple lenders. Feel free to reach out with additional questions!

Best Regards, 

Nathan Roberts

That's correct, you make money when you add value by doing a rehab. If you don't force appreciation through a rehab, you can still do a cash-out refinance but most banks/firms will only do this up to a 70% - 80% LTV minus your current loan obligations and/or existing liens on the property. If you only put down 20% when you purchase a property, without doing a rehab, it wouldn't be worth it to do a cash-out refinance because you wouldn't have enough equity to pull out. I have two investor clients that plan to do a cash-out refinance or simply a refinance in a few years, then sell all properties in 5-7 years (optimal IRR) to roll into a 1031 exchange. They will then purchase a larger multi-family property instead of having multiple single-family properties (Economies of Scale). I hope this helps!

Hi @Tara Jackson ,

Welcome to the BiggerPockets community! For your first investment property, what criteria are you using ie; neighborhoods, bed/bath count, sqft, ROI, looking for value-add (rehab) opportunities, etc? The BRRRR strategy is for sure a great method to increase your wealth. This method allows you to use the same principle investment, after a cash-out refinance, to invest in other properties. I'm here to be a resource to the BP community so let me know if you have any questions. Talk with you soon!

Best Regards,

Nathan Roberts

Hi @Tara Jackson,

Welcome to the BiggerPockets community! For your first investment property, what criteria are you using ie; neighborhoods, bed/bath count, sqft, ROI, looking for value-add (rehab) opportunities, etc? The BRRRR strategy is for sure a great method to increase your wealth. This method allows you to use the same principle investment, after a cash-out refinance, to invest in other properties. I'm here to be a resource to the BP community so let me know if you have any questions. Talk with you soon!

Best Regards,

Nathan Roberts

Hi @Account Closed,

https://www.cityprotect.com is a website that I use for crime reports. Most if not all of the crimes are within 30 days so it can provide some outlook on an area. This website used to be crimereport.com but they changed the layout sometime this year. Like others stated on this forum post, Trulia has a great crime map as well. If you're looking for recent crimes in a neighborhood then CityProtect.com is a great resource for that. There's also GIS Data resources that I can send your way but they may not be what you're looking for. This data would be paired with platforms such as ArcGIS to do research or to create a choropleth map. Feel free to reach out!

Best Regards,

Nathan Roberts