With the huge interest in Cash Flowing Rentals in Kansas City from investors nationwide, I thought it would be interesting to compare it to another rental market I have been seeing promoted on many blogs and websites as a cash flowing market.

I have also included info about the area from which many of our investors come from.

This information is according to Yahoo Real Estate neighborhood profiles.

Kansas City Detroit Los Angeles

Population 450,375 916,952 3,834,340

Population Growth 1.9% -3% 3.5%

Population Density 1424 6265 8388

(residents per sq mile)

Median Age 36 33 34

Medium Income $43,574 $32,426 $42,529

Median Home Age 42 yrs 57 yrs 34 yrs

Median Home Value $146,400 $32,426 $606,375

Ownership % 51.45% 46.05% 36.4%

Rental % 37.04% 38.54% 60.36%

High School Grad 82.9% 69.6% 66%

Unemployment Rate 7.8% 17.7% 7.8%

Returns of 20%-40%, stable economy, availability of affordable housing and an average price of $57,500 for Postive Cash Flowing Properties makes Kansas City a FANTASTIC market to invest in.

Kansas City Investment Properties & Cash Flowing Rentals

Missouri Real Estate Exchange

11333 Hickman Mills Drive

Kansas City, Mo. 64134

Office(816) 761-9400

Fax(816) 761-9401

Toll Free (866) 451-MORE

Email: danreedy@morekc.com

BLOG:  http://activerain.com/blogs/reedy6799

Where should you place your bandit sings and what should you write on them?

First let’s start with what you should write on them and is it better to have them Printed or hand written.

I’ve done both hand written and printed. I think that hand written signs get a better result. Not sure why that is but my thought is people think your not a big company and wont take advantage of them. Try them both and come to your own conclusion.

Now what to put on your sign, its really simply WE BUY HOUSES xxx-xxx-xxxx . That’s all you have to put on there the phone will ring off the hook with all different kinds of situations. People don’t have time to read a book on a bandit signs. Now there is one other phrase I like if your doing Subject To or sandwich Lease option. Which with the economy the way it is right now be careful. For those deals I put

We Buy Homes Little Or No Equity xxx-xxx-xxxx that will make the phones ring too.

Now where to place your signs. The best places for them are at the end of the on ramps or off ramps to major highways. There is a ton of traffic there and they are waiting on the light to turn. Other good places are at stop lights in town make sure you put them on all four corners off the street. You can also staple your signs to the telephone poles or use roofing nails and hammer them on the pole. Your signs will last longer on the poles.

Also make sure were ever you put your signs there is good visibility, you want to make sure that everone can see them.

Make sure to place them on Friday night or early Friday morning around 4:00 am. That’s when I do it. That way you have all weekend for your signs to be seen before the bandit police pull them on you ( city code enforcement ). Most of the time you will get a week out of them. To make bandit signs work you have to put a lot out I’m talking 20-30 a week. I know that sounds like a lot but trust me its worth it.

Good luck till next time.

Sean Marmoy

MOKSRealEstate.com

Bandit Signs are the cheapest and most effective way to market for a beginner by far. Bandit signs, that’s right bandit signs all those plastic corrugated signs you see out there, get it. I prefer hand written to printed signs. I’ve tried them both and the hand written ones are cheaper and work the same or better. You can look for a local place that sells them, 18 x 24 signs work best, get the blank ones. Also make sure what you get stands out too. I always cut then in half. Keep it simple, just put WE BUY HOUSES and your phone #, you really don’t need to put all that other stuff on them. Make sure you use a large permanent black marker. Make sure your words fill the whole sign to make best use of it. Print on both sides unless you are going to put them on telephone pools. You will get all different kinds of calls with different problems with their homes.

Although if you still want to get printed signs or you don’t have a local place here are a couple sites you can get them from. Need signs? Placement of signs is important too. You want to put them in high traffic areas. Like at merger intersections you want to put one on each side of the road. Put them on telephone poles high up so they won’t be pulled down. If you have a subdivision you are targeting make sure you are putting signs at all ingoing and outgoing entrances to the subdivision.
You must be willing to put at least 200 signs a month out to be successful. This shouldn’t cost you no more then 175-225 a month.

Good luck and don’t give up,

Sean Marmoy
MOKSRealEstate.com

There are plenty of ways to find the owners of that little jewel you just found.  We will go over the ones I use the most in this blog.  The first thing you want to do is ask the neighbors around the house.  Tell them you’re an investor in the area and hand them your business card then ask them if they know who owns the house, if they know where the owners live now or have their phone number.  If they seem hesitant tell them your going to ask everyone on the block and the first one that gives you the info will give 20 dollars.

The next thing I do is go to my county web site.  Go to your tax assessor’s site on the county web site.  There you can put in the address and the property will come up.  From there you can find out the property owners name and where the taxes are being sent to.  This is also a good place to find out additional information about the property.

At this point you can either go to the address were the taxes are being sent to and talk with the owner.  See if you can get their phone number from the white pages.

You could put them on your post card list and start sending them post cards.  I make sure to send them 4 post cards in 6 weeks.

If you can’t get their info from the county web site you can send a post card with (Address service requested) on the post card. If none of that works you can go to www.HomeInfoMax.com and for about 20 bucks you can get their info.  Although I would recommend you exhaust all other avenues first.

Good Luck,

Sean Marmoy
MOKSRealEstate.com

There are lot of different ways to do this. I will go over a simple proven method in this blog. You can experiment and let us know what works best for you.

First, what is driving for dollars?  The term diving for dollars came from driving around the area you want to invest in. Another term would be farming the area you are investing in. I prefer to call it driving for dollars.

Things that you will need to do the job.
1.    A mapsco or key map book of your area you can go to http://www.mapsco.com
2.    Note book yellow high lighter
3.    A friend or partner preferable
4.    Digital Camera
5.    Business cards

Ok now that we have all of our material we can get started. You need to pick out 8 to 10 blocks that you want to work in.  Mark it out on your map and choose a starting point. Now take your note book and on the right side and draw a line down the paper about an inch before the side of the paper. In this area you will put a (V for vacant D for distressed R for rental and F for fore sale buy owner) we will get into what all this is for later. Now the reason I like to bring a partner or friend is to write all the info down while you drive and you don’t have to break your neck looking at both sides of the street. The camera is to take a pic of the front of the house to put in to your file so when you  get a hold of the home owner you can look at the pic to give you a better visual of what your talking about.  Business cards are to leave at the vacant properties the owners do come around from time to time.

Now start driving down the street. Make sure you high light all the streets you drive down so you don’t end up back tracking. You are looking for properties that are vacant. How do you tell if they are vacant, if there’s tall grass, gas meter missing , a lot of mail in the mail box , news papers pilled up in the drive way , electric meter missing. These are just a few of the things you can look for. At this point you can take a picture of the front and put your business card in the door. Write the address down and put a V next to it. You might also knock on the two houses next to the house and see if they now were the owner is. You could tell them the first person that can give me the info on the owners and it leads to me buying the property you will give them 250.00 dollars. You are also looking for distressed properties these are properties that have a lot of junk in the yard maybe gutters hanging off property that isn’t taken care of. These properties could be motivated sellers.  You could send them a post card or letter. Which I’ll be going over in another blog.  The properties that have a rental sign in the yards are a hidden gold mind that people over look.. These are sellers and buyers, call the land lords, and ask them if they are in the market to buy or sell. This can help you build your buyers list which we will cover in another blog.  Last but not least the FSBO these properties can be used in a couple ways, you can ask if they will do owner finance in which you could take the property over through owner finance. Or you can match a buyer and seller together and charge a marketing fee.

Make sure you highlight your area you have driven and put your V D R F in the edge of the page to determine which property is what.

Good Luck,

Sean Marmoy
MOKSRealEstate.com

Starting a real estate business can really take a toll on you especially trying to do it part-time with a full-time job and maintaining a family. But if it’s your dream to own a real estate business or buy real estate make sure that you focus on your long-term goal. Don’t get frustrated with the ups and downs, it’s business. Take your time and always try to reinvest capital back into it. The end result may not come 1 year from now, 2 years or even 3. Remember this…BE PATIENT. Take your time with it and make wise decisions based on logic not emotion. Also remember that a business runs itself, if you can leave your business and come back and it’s still making more or just as much money as when you left, it’s a true business, if not you’re self employed. Focus on your 5-10 year vision of a TRUE business, seek counsel and stay consistent by practicing discipline. This will bring you closer to financial freedom day by day.

Happy Investing,
God bless you!

ERNESTO TINOCO
MOKSRealEstate.com

Real Estate is a very secure investment. The ability to collateralize real estate gives you a better chance to leverage off other people’s money. Have you ever gone to your rich uncle for money? Maybe you needed to buy books for school, or pay off some debt. Whatever the reason, there is no better cause for lending you money than buying real estate. Think about it…how does a bank make money? You put thousands in their accounts or cd’s and they give you 1-3% annual return on your money, to then turn around and lend that money at a much higher rate. In other words you lend them very cheap money and they turn around and make it expensive by creating demand. Well let’s see…if I invest $30,000 of my hard earned cash in a cd at 3% for a year I can make a whopping (drum roll)… $900 bucks?! Sorry but your rich uncle is much better off with what YOU have to offer.

Take this for instance: You ask your rich uncle to lend you that same 30,000 to buy and fix up a house, as well as pay any fees involved in the transaction. And then with a well thought out exit strategy you can pay him back in 3-6months (yes it’s possible)…at 10% simple interest. That’s $3,000!!! In max 6 months. Do this twice a year and now you’ve made him $6,000. That’s 20% annual return. Rule of 72 tells us you can double your rich uncles money is 3.6 years. It would literally take you 24 years to do the same at your bank!

Using the right security documents your piece of real estate is collateral in case you don’t pay your uncle back. He just basically cut out the middle man and is making money with his favorite family member!

Remember to always consult an attorney and obtain specialized training before implementing any of the above. It’s not as easy as it sounds, it takes a system and years of knowledge. Not that you have to have all the knowledge about investing using private money. But you do have to surround yourself with those who do.

Till next time,
God Bless!

Ernesto Tinoco
MOKSRealEstate.com

First meet with them at the job site so that you can look over the job and see what they would do. 

Ask “What would YOU do?” questions about the houses.  Ask them what they would take out or put in. Base off of bathroom, kitchen, flooring and would they put new windows in. Each place will be different, what you are looking for is are they going to be on the same page as you. So you can feel comfortable with them making decisions without you there.

Ask to see pictures of past jobs.  You’re going to need at least three references.  When you call the references find out what kind of work they did, how long it took them and if they are clean workers. Do they pick up after them selves or is the job site always a mess. What hours did they work i.e. came to the job site early or were they coming at different hours. This will tell you how dependable they are.

How many people are in there crew and how many do they have. This will let you know if you have more than one job going on they can handle it.  Do they have their own equipment.  This is an important one, do they have the money to buy the materials. You do not want to give them money up front to go buy the materials, I repeat DO NOT give any one money up front to do a job. What you’re looking for is a contractor to buy all materials and labor for the first week. So they will give you the bill for the work they have done and you pay it then.  Ask them what kind of work they do i.e. paint, dry wall, windows, bath rooms, you get the picture. For the things they don’t do, will they contract them out for you?  Find out what their time frame is on an average job i.e. can they be in and out in a month on a normal job.

You want a contractor that’s going to bid the whole job not just labor.

This should get you headed in the right direction when it comes to hiring a contractor.

Sean Marmoy

MOKSRealEstate.com

What is the most important thing in a real estate transaction, the property? location? financing? It’s actually the buyer…WHY? most investors try to find the deal that makes sense and line up every aspect of the transaction before figuring out how they will exit.  Your buyer is you exit strategy and you should line up this aspect of the transaction before making a move.  Where are most of your buyers located?  What do they want?  How much money do they want to make?  How are they buying bank financing, their own cash or terms?  You can make money with just about every type of buyer out there.

A buyer with credit can obtain financing and is likely to attract hard money or private lenders for acquisition and rehab you can wholesale to these guys.

A buyer with cash will most likely want a great deal since they’re not using leverage and paying out of their pockets, treat these guys good, you can find properties cheap right now and may be able to net 3-5K per deal in as little as 1-2 weeks.  The key here is speed, they can close within 5-10 days of obtaining free and clear title.

The term buyers have some cash but can’t come to your full price, whether or not they have credit they want to consider owner financing with a good down payment.  Owner financing wholesale deals short-term can create good residual income for you.

Ernesto Tinoco
MOKSRealEstate.com (Under Construction)

MAO simply stands for Maximum Allowable Offer.  To come up with MAO we first have to know what the property will be worth when all repairs and updates are done.

ARV (After Repaired Value) – There are a few websites you can use such a www.Zillow.com or you can become good friends with a realtor and have them pull comps for you on the MLS.  A comp is at least 3 comparable sales no more than 6 months old within a mile without crossing any major landmarks.

Rehabber Finished Costs – The Rehabber will usually want to have invested 60% – 70% of the ARV into the property.  This gives room for unexpected costs as well as profits.  This also allows the rehabber to lower the sale price of the house for a quick sale.

Holding and Loan Fees – 5% of the ARV should allow for any financing costs involved in the rehab process.

Rehab Costs – This is the total materials and labor costs involved.  If you are not an experienced rehabber I would recommend getting an estimate from a reputable contractor.

Wholesalers Costs – This is the amount that you will charge if you are wholesaling the property.  If you are the rehabber and did not find this property through a wholesaler then you can omit this from the calculation.

Once you have figured out all of your costs involved you can get the MAO.  Simply subtract your Holding and Loan Fees, Rehab Costs and Wholesalers costs from your Rehabber Finished Costs to get your MAO.  Your negotiations should go much easier when you have a hard MAO number rather than a “gut” or roughly estimated value.  Your Rehabber’s and Investors will keep coming back for more when they are finishing their properties at 65% to 70% of ARV.
The Math:

Retail Value –                                   $100,000
X 70%
Rehabber Finished Costs –                $70,000

Holding and Loan Fees -                     $5,000
Rehab Costs (Will Vary) -                  $20,000
Wholesaler’s Costs ($2500-$5000)-   $5,000

MAO                                                  $40,000

Good Luck and Happy House Hunting,

Sean Marmoy
MOKSRealEstate.com (Under Construction)