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Hello Investors,
🔥 THIS WEEK
San Diego House Hack: $72K down (5%) owns $1.45M, rent 3 units $6,758/mo, live free building $55K/yr equity
Napa Foreclosure Duplex: $47K down owns $949K Wine Country, $2,500/mo rent offsets, $40K/yr equity
KC Midtown 4-Unit: Strong 7.6% cap (6.5% CoC) but self-management mandatory in Plaza location
Spring Valley 48-Unit: Massive $5.6M down for weak 2.4% CoC BUT $11M appreciation play over 10 years
🏆 KC Linden 28-Unit - 11.4% COC DAY 1 + $58K UPSIDE
📍 1707 E 97th St, South Kansas City, MO 64131
💰 Price: $4,200,000 ($150,000/unit)
🏠 Units: All 28 3BR/2BA Townhomes, Premium Unit Mix
🏦 Year 1 CF: $133,620/yr (11.4% CoC) | Market CF: $192,420/yr (16.4% CoC)
11.4% COC at Current Rents / 16.4% COC at Market Rents
Key Metrics:
Critical Numbers | |
|---|---|
Down Payment (25%) | $1,050,000 |
Total Cash Required | $1,176,000 |
Current Avg Rent | $1,475/unit |
Market Rent | $1,650/unit |
Annual NOI (Current) | $378,792 |
Year 1 Cash Flow | $133,620 ($11,135/mo) |
Year 1 CoC (Current) | 11.4% 🔥 |
True Cap Rate | 9.0% |
Expense Ratio | 19.5% ✅✅ |
Debt Coverage | 1.59x |
Organic Value-Add Sitting There:
Rent Optimization | |
|---|---|
Current Total Rent | $41,300/mo (28×$1,475) |
Market Total Rent | $46,200/mo (28×$1,650) |
Monthly Upside | $4,900 |
Annual Upside | $58,800 |
At Market Rents CoC | 16.4% 🚀 |
Ultra-Efficient Operations: 19.5% expense ratio exceptional due to tenant-paid utilities ($0 owner cost), no HOA/landscaping fees, well-maintained condition minimizing capex creates world-class efficiency
All 3BR/2BA Townhomes: Premium unit mix commands family rents, 2 bathrooms + townhome format perceived higher value versus apartments, some units have 2 living areas further premium
11.4% CoC BEFORE Optimization: Rare - most deals require 2-3 years execution to hit 10%+, this delivers immediate strong cash flow from closing with current below-market rents
$175/Unit Monthly Upside: Current $1,475 versus market $1,650 = organic value-add through natural lease turnover, no forced evictions required, no renovation capital needed
1.59X Debt Coverage Exceptional: Can absorb 37% income drop before breaking even, extremely safe from foreclosure risk, 68.4% break-even ratio creates huge safety margin
South KC Family Market: Stable neighborhood near schools/retail/transit, family-oriented demographics willing to pay premium for 3BR/2BA space, strong employment healthcare/logistics/tech
Three Execution Strategies:
Conservative: Hold current rents letting natural turnover capture market (11.4% CoC grows organically)
Moderate: Offer $100/month increases at renewal retaining 90%+ tenants (14-15% CoC Year 1)
Aggressive: Push full market $1,650 at all renewals accepting 10-15% turnover (16%+ CoC Year 2)
10-Year Wealth Creation: Cash flow $2M+, equity $3.23M, total wealth $5.23M+ on $1.176M invested = 345% return (34.5% annually)
Risk Level: LOW - Turnkey cash flow Day 1, organic rent growth no capital required, exceptional debt coverage, efficient operations, stable market
Recommended Strategy: EXCEPTIONAL BUY - 11.4% Day 1 CoC with $58K organic upside through lease turnover makes this rare Kansas City gem, $150K/unit for 3BR/2BA townhomes undervalued
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Educational only. Not investment or tax advice.
KC Afton 24-Unit - NEEDS $900K CAPITAL
📍 112 E 43rd St, Southmoreland, Kansas City 64111
💰 Price: $3,189,000 ($132,875/unit)
🏠 Mix: 4×2BR/2BA Renovated + 20×1BR/1BA Original Condition
🏦 Current CF: $48,593/yr (5.4% CoC) | Stabilized: $164,134/yr (9.2% CoC)
Cash Flow Year One: $48,593, 18.1% Expense Ratio
Key Metrics:
Critical Numbers | |
|---|---|
Down Payment (25%) | $797,250 |
Total Cash Required | $892,920 |
Year 1 Cash Flow (As-Is) | $48,593 ($4,049/mo) |
Year 1 CoC | 5.4% |
True Cap Rate | 7.4% |
Expense Ratio | 18.1% ✅ |
Debt Coverage | 1.26x |
Value-Add Requirements:
Renovation Economics | |
|---|---|
Units Needing Renovation | 20×1BR/1BA |
Cost per Unit | $40-50K (luxury finish) |
Total Capital Required | $900K |
Post-Reno Rent | $1,580/unit |
Monthly Upside | $630/unit × 20 = $12,600 |
Stabilized CoC | 9.2% |
Total Investment | $1,792,920 |
Premium Southmoreland Location: 2 blocks KC streetcar, walking to St. Luke's Hospital/Westport/Plaza, top-tier Kansas City neighborhood justifying premium pricing
Proof of Concept Exists: 4 units already renovated successfully at $45K each generating $1,488/month demonstrating conversion economics work, but execution on remaining 20 units massive
$900K Additional Capital Required: Beyond $893K initial need another $900K for renovations = $1.8M total deployment to achieve mediocre 9.2% CoC stabilized
2-3 Year Execution Timeline: Cannot force renovations on occupied units, requires natural turnover creating long stabilization period with weak returns throughout
Recommended Strategy: Negotiate to $2.8-2.9M improving initial CoC to 7-8%, this requires developer/renovator skillset not passive investor, Linden superior alternative