Hey All!
So I have been analyzing countless properties around the Kansas City area, primarily Waldo/Westport Area ( 64111,64112, etc). I was wondering how feasible these numbers are. I have been slowly and carefully forming my criteria based on my goals but understand that some markets do do not align with investor criteria, so I was looking to get some insight from you guys familiar with the area to get an idea what is possible around here. Also, I have had trouble finding some actual rental rates around the city, making it hard getting accurate results (I have been trying to be very conservative from the numbers that I have found) Criteria as follows:
- Buy at 15% - 20% discount. I understand this is difficult to achieve but they are out there! ;)
- 20% - 25% downpayment.
- Needs to Cashflow no less than $200/mo after 50% Rule (Including Mortgage Payment)
- Cash on Cash: >10%
- Always budget for 25% more for repairs and renovations, I have learned that repairs and renovations most always costs more than anticipated. (Of course this number would come after walking and inspecting said property.)
So lets say I am analyzing a 2 Bed/2Bath house in Waldo for $140k.
- Buy at $112,000. ($140,000 x 20% = $28,000 discount)
- Put $22,400 as a down payment. ($112,000 x %20)
- Finance for $89,600 for 30 years fixed at 3.8 (currently it is closer to 3.6 but hey, Id rather over than under estimate).
- After walking and checking it out I intend to put $5k into the home, I add another $1250 (25%) on top for a safety net.
Down Payment: $22,400
Closing Cost: $2,000
Repairs: $6,250
Total Investment: $30,650
Lets say it rents out for $1,100 (please please correct me if this is too far off), after operating expenses (-$790.83) it nets $309.17. According to the 50% Rule it nets $132.50, which is not in my criteria but I do realize there are numbers I can tweak. primarily the purchase price and down payment. If that doesn't work, I can move on.
Is this realistic in the Kansas City market? Any feedback would be greatly appreciated! I do also apologize for the long drawn out analysis, but I have only done them in private and I feel like finally sharing one can push me and really open up discussion for others!
