Looking for underwriting feedback on a stabilized 5‑unit portfolio in Blue Springs, M
Key Numbers:
• Purchase price: $1,060,000
• Gross income: $92,100
• Expenses (tax + insurance): $14,000
• Cap rate: 7.37%
• 100% occupancy
• Tenants pay all utilities + lawn
• Leases locked through early–mid 2027
Property Condition:
• Updated interiors (flooring, carpet, paint)
• New roof on one building (2023)
• Exterior paint on another (2025)
• Long‑term tenants, one at 17 years
Market Context:
Blue Springs is a strong rental submarket with low vacancy and high tenant stability. Curious how others would evaluate this package given current interest rates and investor sentiment in September.
Questions:
• Does a 7.37 cap feel competitive in your market?
• How would you underwrite long‑term tenants with low turnover?
• Are you seeing similar expense ratios in tenant‑paid‑utility portfolios?
Appreciate any insights or comps from similar Midwest deals.
Most Popular Reply
One point I haven't seen mentioned: the $14K in taxes+insurance reflects the current owner's existing tax assessment, which has likely gone unchanged for years. If a buyer pays close to $1.06M, many counties reassess the property at the sale price, which can significantly spike the property tax the following year — sometimes 2-3x the current amount. It's worth any potential buyer checking Jackson County's (Blue Springs) reassessment rate and running the NOI with the projected post-sale tax, not the historical one. That can move the real cap rate more than it appears at first glance.