KMB Investment Strategy
To put it in simplistic terms, our strategy at KMB Investments LLC is to find under valued and distressed properties, improve the value by fixing up the property, and either sell the property for a profit or rent the property for annual returns.
At KMB we utilize a proven and unique proprietary process which generates returns regardless of current market conditions. What makes our process unique is the fact that it is sustainable, scalable, repeatable and predictable.
Buying foreclosed properties at auction is mostly a mom and pop business attracting stray investors and construction contractors. They buy a limited number of homes in a given area without any process. They have limited resources and cannot take advantage of bulk buying or rehabilitation. As a result, their outcomes are not sustainable, scalable, repeatable or predictable. We, on the other hand, have institutionalized the distressed property purchasing process by building a platform around it.
We focus on buying at the right price. All our investment purchases are based on extensive research with licensed real estate tools. This reduces vulnerability and enhances the probability of higher returns. Even our rental properties are purchased at such value that even when fully rented, there is an option to sell the asset for a healthy profit. We focus on identifying areas or pockets where changes or opportunities are sprouting and spot them, then cash in on them before others have time to take advantage of the opportunity. Buying right is the secret to sure success in this market. We have access to a large database of properties. This allows us to learn the details on each property, enabling us to make the right decision. The system and database has a 14-year proven disciplined track record. The key advantage is the ability to spot trends in the property market before others have a chance to do so.
Our process and access to information enable us to operate under a conservative buying policy. We are not influenced by emotional attachment to any property or desperation to buy, which allows us to wait for the right opportunity.
To further enhance our selection and purchase process, we maintain accredited, proven, licensed legal professionals who conduct contract, legal research, title search, certificate of occupancy and other work relating to the legal status and requirements related to the investment properties. We use a formula to help determine which properties would be profitable. We limit our total investment, including purchase price and rehabilitation costs of the property to 65% of what we think we can sell it for.
We don’t purchase properties where time is a significant factor in projected profitability. In other words, we are less dependent on market conditions because we choose properties that will gain value through the improvements we add. Our volume of renovations has created an enormous savings and efficiency to the renovation work we do. Our pricing is based upon building 200 new kitchens and 400 bathrooms a year. Unlike typical renovation costs, a typical new kitchen costs us approximately $6,000, and a new bathroom approximately $2,500.
Because we purchase properties below market value and add value through renovations, we have the ability to price our properties below the market, which results in a competitive advantage and quicker sales.We are able to deliver a fully refurbished house at slightly lower than the market price to the end user in move in condition, with absolutely no work to be done. This gives us a selling advantage over existing homes, which makes us less subject to the whims of the local real estate market and increases the demand for our property; resulting in a quick and often times over bid sale price.
Renting properties provides KMB investors with a steady annual cash flow. Because we purchase all our properties at a distressed below market value, our cash flows are greater than the state average. Our rental properties are also able to be flipped for a profit as well.