Fix and Flip Real Estate Investments in Kansas City

Private Lender Insights on Kansas’ Market

The Kansas City real estate market is one of the top housing markets in the country. One reason is that it is one of the most affordable housing markets in the country for both homebuyers and real estate investors. Private mortgage lenders and data experts can agree that the Kansas City real estate market shows a lot of promise for real estate investors.

Homes are going under contract, and they’re selling for nearly 4% more than the asking price. Over the past year, the appreciation rate on Kansas City homes has been around 19%. In Q2 2022, Kansas City real estate appreciated at a rate of 6.35%, which equates to an annual appreciation rate of 28%. HPA (home price appreciation) is staying strong in Kansas City at a time when it is dipping elsewhere in the country.

Active listings have increased from 3,444 in September 2021 to 4,368 in September 2022. Average home sale prices have also increased by 8% YOY — causing the median sale price of a house in Kansas City to jump to $270,000.

Kansas City’s rental market was ranked by WalletHub as one of the top markets for renters and for rental property investors because of it profitability, quality of life rating, and general affordability. While rents are rising nationwide, Kansas City rents have remained relatively unchanged.

From September to October 2022, the average rent for studio and two-bedroom apartments in The Heart of America remained flat. One-bedroom apartments saw a slight increase of 2%.

The best way for real estate investors to make a profit in Kansas City is to avoid purchasing the most expensive properties in the city’s real estate market.

Instead, for investors to make a good profit, they’re encouraged to use their rental property financing or bridge loans to purchase more reasonably priced long-term rental and fix and flip investment properties — of which there is a solid supply.

Why the Fix and Flip Market is Booming

Kansas City has become one of the best fix and flip markets for real estate investors.

Fix and flip investing is a great short-term solution for investors interested in breaking into the Kansas City real estate investing market because of the potential for massive profits. In Q2 2022, the gross ROI on flips in the Kansas City metro area was 16.7%, based on the median purchase price of $205,660.

Additionally, real estate investors saw a gross flip profit of $34,290 in Q2 2022. While fix and flip profits increased by almost $4,000 YOY, the ROI on fix and flip investments was flat YOY.

Savvy investors know that fix and flip ROI and profits are directly tied to the right property, the right neighborhood, and the right fix and flip loans and financing. The way investors approach fix and flip investments will determine the experience and success of the project, as well as finding the right real estate investment loans.

To maximize profits and success on a fix and flip investment, investors should remember to:

  1. Recognize real estate investment opportunities
  2. Research fix and flip properties
  3. Raise capital or secure fix and flip loans & financing
  4. Choose the right contractors
  5. Develop a sales plan

No home renovation journey is perfect. Both experts and those just getting started flipping houses will inevitably face some setbacks and obstacles.

But, following these guidelines and finding trusted financing partners and private lenders such as Lima One Capital who offer rehab loans for investors, bridge loans, and hard money loans in Kansas City will set you up for a rewarding and profitable fix and flip investment experience.

Kansas City Real Estate Investing Insights

Fix and flip real estate investing was squeezed in 2020–2022 as home prices spiked and bidding wars erupted. But that housing market has passed, and now the environment is much more favorable for real estate investors to add fix and flip properties to their portfolio.

Careful investments in the fix and flip market in Kansas City should lead to solid returns. So, while the housing market seems to be tumultuous, fix and flip investors can be confident in the strategy if they execute solid project plans.

Securing the funding you need to get started on your fix and flip project is easy when you partner with the right private mortgage lender. Lima One Capital offers some of the best fix and flip loans for real estate investors.

We can cover up to 90% of the cost of the property and rehab with a term length of 13, 19, or 24 months. These interest-only hard money loans in Kansas and 45 other states across the nation are ideal ways to minimize out-of-pocket costs during the rehab period of a fix and flip property.

Our clients and the real estate investors we work with have different investment strategies, so we have designed a full suite of loan options to allow us to cater to their individualized needs — whether fix and flip loans, bridge loans, or rental property financing for long-term holds. Contact us today to discuss your next deal, or if you have a deal in hand, accelerate the process by applying now.