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Investing in The Montage at Lee’s Summit: A MultiFamily Development with Promising Returns

So, you’ve heard about this new investment opportunity called EquityMultiple and their listing for a MultiFamily development in Lee’s Summit, Missouri. It’s called The Montage at Lee’s Summit, and they’re talking about a pretty sweet return of 22.8%. But is it too good to be true? Let’s dive in and see what’s up with this project.

A Closer Look at The Montage at Lee’s Summit

This place is gonna be a big community with 226 townhomes and villas. They’re planning to have all sorts of cool stuff for people to enjoy, like trails, water features, firepits, pickleball courts, a dog park, clubhouse, fitness facility, and a resort-style pool. Plus, it’s in Lee’s Summit, Missouri, which has a growing population, more jobs, low unemployment, higher household income, rising rents, and low vacancy rates.

Location: A Growing Suburb in the Kansas City Metropolitan Area

Lee’s Summit is a fast-growing suburb just 16 miles southeast of Kansas City. It’s the 6th largest city in Missouri and has good schools, parks, and community amenities, making it a great place for families to live.

Population Growth: A Trend Expected to Continue

The population in Lee’s Summit has been growing like crazy, from 8,267 in 1960 to an estimated 104,638 today. And it’s expected to keep growing, with projections saying the Kansas City/Lee’s Summit area will grow by over 30% by 2040, adding as many as 38,000 new residents.

Employment: A Rising Job Market

The job market in the Kansas City area is looking good, with a 2.3% increase in employment in the fourth quarter of 2023 compared to the same time the previous year. That’s about 25,000 new jobs. Some big employers in the area include HCA Midwest Health System, University of Kansas Hospital, Saint Luke’s Health System, Ford Motor Company, T-Mobile, and Cerner (which was bought by Oracle).

Income: Above Average Household Earnings

People in Lee’s Summit make pretty good money, with a median household income of around $89,140. That’s about 20% higher than the Kansas City area and 1.4 times higher than the state average.

Rent Growth: A Positive Outlook

Rents in Lee’s Summit have been going up, with a 5% increase over the last 12 months to around $1,288 per month. That’s higher than the average for the Kansas City area, which is $1,172 per month. And it’s expected to keep going up, with forecasts saying rents will increase by about 3.9% per year through 2024 and 2025, reaching an average of $1,471 per unit per month.

Vacancy Rate: A Decreasing Trend

The vacancy rate in Lee’s Summit was about 6.2% in July 2023, which is higher than its long-term average and the Kansas City area average. But it’s expected to go down, with predictions saying it’ll be around 5.7% by 2024 and 4.7% by 2025.

Are the 22.8% IRR Projections Realistic?

Looking at all this info, it seems like The Montage at Lee’s Summit could actually hit that 22.8% return. The growing population, strong job market, higher incomes, rising rents, and lower vacancy rates all point to a good outlook for this investment. If you’re interested in a MultiFamily development with promising returns, The Montage at Lee’s Summit might be worth checking out. For more info, head over to Jessica Fulk’s website to learn more about this and other real estate investment opportunities.