All Forum Posts by: Maddy Morell

@Gene K. thank you! I figured that would be the case - messaging you. 

Has anyone here been active in Kansas City, KS (KCK) recently?

I'm looking at some smaller multifamily in that market (3–10 units, some converted SFH setups that are common in the area) and curious how others are approaching:

• Financing — are you seeing DSCR loans, local banks, or small-balance commercial work best right now?
• Buyer appetite — are investors preferring updated/stabilized, or are value-add plays with strong Section 8 rent potential still moving well?
• Exit potential — what price per door are you actually seeing stick in KCK (Im looking in 66101 to be specific) once properties are cleaned up and performing?

Every market feels different, and I’d love to hear what’s been working (or not) for those of you who have been buying/selling near KCK lately!

Thanks! – Maddy, Agent & Investor, Kansas City area (KS/MO) 

@Zachary Deal Good to know — appreciate that insight. I figured splitting into two DSCR loans could definitely be a cleaner path, especially with a few units still vacant. Seller hadn't considered this, was just thinking we'd sell as a package commercially - so great to hear! Helpful to hear the loan size ceiling is higher than I realized too. Thanks!

@Josh C. - You’re right — $130k/door definitely feels aggressive on the surface. The challenge is there aren’t a lot of recent comps in KC for newer Class A, studio-loft style assets to lean on, which is why I put this post out — trying to get feedback on how to structure it creatively to make it more attractive.

What we do know: Class C comps nearby are $100k+/door, so with this being Class A, 2021 build, modern loft layouts (w/ separate lofted bed area), and in a highly walkable location right by the college, we think there’s justification to push above that.

That said, I fully recognize we’re testing the top of the market. The idea is less about convincing someone to pay sub-4 cap straight up, and more about offering terms — assumption of the in-place note at a rate better than you’d get today (hopefully), paired with a larger down payment — so structure helps offset the premium. 

I’ll keep the thread updated as we see how buyers respond at these numbers!

@Jackie Carmichael - That’s a great breakdown — thank you for laying it out so clearly.

I don’t have the full terms yet, but I’d expect the existing first is at a stronger rate than what you’d find on a new loan today, which makes the assumption route worth exploring. Waiting to gather details from Seller/Bank in the next day or so. 

Seller isn’t in a rush to close — he mainly wants to free up capital for another project — so the focus is really on structuring this in a way that’s most appealing for a buyer while the property finishes stabilizing. 

If the assumed first has favorable terms, then pairing it with a seller 2nd could be attractive.
If not, it may make more sense just to offer it traditionally and let the next buyer bring agency once occupancy/collections are cleaned up (PM working on it now, its so close!).

I’m curious how others have structured deals in this “in-between” stage — where the asset is Class A and nearly stabilized, but still has a few vacancies/collections issues to work through. 

Did they find assumption with a second worked better, or just a straightforward sale with the understanding that the upside is still there for the next owner?

@Nick Belsky - Thanks for laying that out — that makes total sense. 
The main thing holding this back from agency right now is stabilization. Occupancy is about 88% with a handful of tenants in eviction and a few units vacant, so collections haven't been consistent enough yet to hit that DSCR threshold lenders are looking for.

That’s why the seller wanted to keep creative options on the table — not because agency won’t be possible, but to give buyers flexibility to step in before it’s fully stabilized. Once occupancy is back over 90% with clean collections, agency should be a great fit, and I agree the terms available right now look very attractive.

In the meantime, I’m just trying to determine the best way to structure it during this in-between stage, and whether the options we’re considering make sense for buyers. Appreciate your perspective on that!

@Greg Kasmer - Thanks Greg, that makes a lot of sense. In this case, I’m representing the Seller rather than holding the property myself, so a refinance isn’t in the cards. He purchased this year and has put quite a bit into updates/renewals on exterior and completed 1 unit - plan to update 2 more, and pass it along with some remaining value-add upside for the next buyer.

Current NOI is sitting around $29k with several units vacant or under-market. Stabilized projections are closer to $53k once the last few renovations are complete and it's fully leased up. We should see some of that NOI increase even before closing as the updated units get occupied!

Appreciate the insight on pre-payment penalties — definitely a good point for a buyer considering DSCR or conventional on separate parcels.

@Joe S. -- 

That makes sense — I’ve run into that too where the “significant down payment” ends up feeling like the same capital requirement as new debt.

In this case the seller is talking around $2.4M down on a $6.5M price. While that’s a big chunk, it could be a strong option for a buyer who wants to avoid lender red tape, lock in terms directly with the seller, and step into a Class A, 2021-built property without competing on the open market.

@Dennis Bamford -- 

Thanks — that’s exactly why I asked about the master lease, I’m not sure yet if the seller would consider it, but I wanted to understand how it could be structured in case it’s a fit for the right buyer. My goal is to make sure I’ve got multiple options to present.

It's a Class A property, built in 2021, all studio loft-style units and updated finishes. On the metrics side, I've been looking at in-place vs. pro forma cap rate (about 3.8% in place, closer to 4.6% pro forma at market rents). Are there other return metrics you'd recommend focusing on for something newer like this — IRR, cash-on-cash, debt coverage, etc.?

The seller isn’t under pressure, but he’s an investor client who likes to reallocate capital into new projects. He’s open to selling and willing to look at creative structures that give a buyer a feasible entry if we can still meet his pricing goals!

@Jackie Carmichael -- Thank you for the info - super helpful! 

I like the idea of pairing an assumption with a seller second if the rate makes sense, though I’ve dealt with the same previously  w/ lender pushback. 

On this property, the seller is open but would want a fairly large down payment if carrying — we’re at an asking price of $6.5M and around $2.4M down if seller financing. 

I’m weighing whether a hybrid structure (assume or bridge + seller note) is more realistic at those numbers. 

Do you think those terms could work, or would you lean toward another option in today’s market? When you’ve done deals with a seller second behind an assumption, how did you navigate the lender approval piece? Was it more about the relationship with the lender, or finding one that’s just more flexible?