706 NE Darwin St

Lee's Summit, MO 64063

$240,000D

3 bd · 2.0 ba · 1,104 sqft · Built 1965 · SingleFamily · Pending · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,659/mo
• Mortgage (P&I): −$1,259
• Tax + insurance: −$284
• HOA: −$0
• Vac / Maint / Mgmt: −$348
• Net cashflow: $-232/mo
• Annual: $-2,783/yr
• Cap rate: 5.13%
• Cash-on-cash: -4.14%
• DSCR: 0.82
• 1% rule: 0.69%
• Cash to close: $67,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $240k.
• At list price, monthly cash flow is $-232 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $199k (17.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $166k (30.9% below list).
• It's been on market 33 days — a 3% lower offer ($233k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $166k (30.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Lee'S Summit R-VII (suburban): math 46% / reading 55% proficiency, ranked #23 of 324 in MO (top 7%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 16% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising fast (+5.0%/yr); 103 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 4,002 units permitted in Jackson County in 2024 (2,271 in 5+ unit buildings).
• Jackson County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Cap rate 5.1% vs local median 2.6% in Lee's Summit — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 33 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• Built in 1965 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.