Wednesday, January 31, 2007

Kansas City MLS Numbers...In The Raw

From the Heartland MLS (serving Greater Kansas City and some outlying areas) I found the following;

All of MLS
Total units currently for sale: 26,708
Total units sold in previous 12 months: 39,585

Johnson County, KS area only
Total units currently for sale: 4,593
Total units sold in previous 12 months: 10,801

JoCo Multi-family homes only
Total units currently for sale: 48
Total units sold in previous 12 months: 83

What is your take on these numbers?

Tuesday, January 30, 2007

Section 8 and the Income Property Owner

As an owner of income property sooner or later you will be asked if you accept Section 8 tenants. Before you answer the question it is my hope that you will have thought about the question in advance. Because my answer to prospective tenants is not a simple "yes" or "no". It goes deeper than that.

To many landlords all Section 8 is the same. But nothing could be further from the truth. I'll give you a for instance at the risk of recurring wrath. In my future dealings I will never again recommend to my clients, or myself, to take on a tenant from the Kansas City Housing Authority. And sadly, my decision has nothing to do with the tenant! It has to do with the KCHA. In my dealings with them, and I swear I am not making this up, I have called them over 80 times for every 1 phone call I get back from them! (And yes, I have logs.) Employees leave without ever terminating their voice mails. Inspections are skipped. Reports are never forwarded. Calls not returned. Have some fun some time and try to call in on the main number. Let me know when they answer.

On the opposite side of the issue you have the Independence Housing Authority. Here you have a group of people who understand they are in a business that deals with human beings. Calls are always returned, sometimes within an hour, or so. Communication is excellent through mail. Appointments are kept. Payments mailed on time, every time.

Now I ask you, as a landlord, who would you want to accept tenants from?

Another thing for the savvy landlord to consider is the security deposit. Most (I haven't run into any) housing authorities will not pay a security deposit. So if you are going to get one, and I recommend you do, it will have to come from the perspective tenant. If they cannot get a SD, I recommend you move on.

And lastly, as far as this blog is concerned, an issue of fairness and compliance must be addressed. I have heard landlords quote different prices to tenants based on their ability to pay or if Section 8 is to be involved.

"The rent is $695/mo with a $500 security deposit."

"I am Section 8 approved up to $725/mo."

"Well, for Section 8 the monthly rent is $725/mo."

Be careful. For here you are on very dangerous ground...

To discuss this topic further be sure to leave a comment or email me!

Monday, January 29, 2007

Flip This House!



This well cared for home is being offered as a great opportunity for the first time investor! Located in an exclusive neighborhood with comparables coming in well over $30,000 this all brick, two bedroom one bath home (well, in the interest of full disclosure the bathroom is really more a hole in the floor since there is no active plumbing running to this home) will be offered on a first come first served basis. The initial asking price will only be $41,999. The land alone is worth more than that! After repair value rents should be well above $350 per month...if you can collect it.

Some landscaping, minor roof repair and re-pointing of the brick work will make this baby sparkle. To arrange for your private showing please allow 48 hours so that I can get a security company to escort us to this soon to be gated community.

NOTE: Not all potential flips are as obvious a bad choice as this one...you'll need experience or a professional investment real estate agent to know the difference...

Net Operating Income - Formula for Success

When determining whether or not to pull the trigger on a property for income purposes it is important to know the actual Net Operating Income. The basic formula is this;

Gross Operating Income - Operating Expenses = NOI

TIP #1: When determining the GOI allow for a fair, historical vacancy rate and walk the neighborhood to be sure the rents being paid on this property are in line with other properties in the neighborhood.

TIP #2: Operating expenses are crucial to this formula. Account for everything. You may even ask for the seller's Schedule E right up front to fish out the actual numbers.

Almost every reliable real estate caluculation for investment properties involves the NOI. Make sure you get it right!

For more details on figuring expenses feel free to email me or post a comment.

Sunday, January 28, 2007

Putting Greenspace in Urban Kansas City


Today's Kansas City Star had an interesting article on decking I-670 through the urban core to allow for an easier transition between the city's Crossroads area and the soon to be alive Power & Light district. http://www.kansascity.com/mld/kansascity/16562673.htm

Several ideas were bounced around as to the end use of this deck. I would like to come down on the side that says "yes" I'm for it. And I would like the space to be used for parkland and monuments to Kansas City's rich past. There are, of course, budgetary concerns and there will be no doubt a several decade's delay to get it all done. But I think it would be great.

Currently I live out in the suburban jungle. Excellent schools. Plenty of grocery stores. Nice people. But having lived in Bethesda, Maryland I am looking forward to the day when my kids are out of school and I can head back down to a more urban lifestyle. And it would be nice if KC could continue it's downtown renaissance.

I don't think I'm alone. There are many of us trapped out here in the 'burbs waiting for our chance to get back to city. Keep up the good work Kansas City. You'll get my entertainment dollars when the P&L opens up!

Friday, January 26, 2007

Credit Scores & Credit Repair

Below you will find an excellent explanation of how to help your credit score. Brought to you by Christina Whipple of Keller Williams Realty in San Antonio, TX.

http://blog.christinawhipple.com/archives/18-Five-Common-Credit-Repair-Mistakes.html#trackbacks

Sell Your Home with Margaret Rome
: Rriinngg....Rriinngg...

Sell Your Home with Margaret Rome
: Rriinngg....Rriinngg...

Mortgage Fraud in Kansas City

If there is one thing that everyone needs to be aware of it is mortgage fraud. And the problem has been so prevalent in Kansas City that the FBI stated that we, yes we, were one of the worst cities in America for this kind of felony. If you have been watching the news recently you would have seen that even mayoral candidates and a sitting city councilwoman have been indicted on mortgage fraud counts.

The Kansas City Star http://www.kansascity.com/mld/kansascity/business/16503526.htm has a different story almost daily on different real estate fraud schemes that affect everyone in town through higher mortgage rates, taxes for law enforcement, etc. Fortunately through stories like these the problem is becoming more and more well known and real estate professionals are beginning to take action.

Some of the better known ways to commit mortgage fraud are;

  • misstating income on mortgage application
  • appraisal coming in higher than is realistic (especially with refinances)
  • non-approved and/or non-disclosed seller incentives to aid buyer
  • undisclosed "forgivable" second mortgages
  • inflation of purchase price to allow for "built-in" down payment
  • a mortgage broker turning in to the end lender incomplete files or files with additional documents not available to everyone

Sadly, I could go on and on with different scenarios in which you can commit this crime. There is a perception that no one gets hurt. But with skyrocketing foreclosure rates which can lead to decreasing neighborhood values, I think you will see that it touches everyone.

And excellent blog read from a Michigan real estate agent can be found at http://activerain.com/blogsview/38652/UnMasking-the-Face-of showing how each and every one of us needs to be cognizant to this crime and do what we can to prevent it.

Your comments and opinions on this are welcome. Especially if you have war stories of your own. Maybe some time, with permission, I will share a few of the horror stories my clients have been through.

http://www.listwithchris.net/

Thursday, January 25, 2007

Changes

Recently, like all of you, I have been struggling with focus when it comes to technology. I have changed my web host provider to the Keller Williams Realty system and I did this shortly after discontinuing this as my main real estate blog. My apologies.

To make a long story short, I am going to keep this blog chugging along. Sorry for any inconvenience.

I do want to make this blog more of a conversation, however. Nothing is more boring to me than hearing myself talk...er, type rather. Post a comment or question any time you like.