Helling Cir, Heber City UT 84032

Helling Cir, Heber City, UT 84032

Condominium: 3 bedrooms , 2 bathrooms

Year built: 2022, Size: 1585 SF

Investment strategy: Rental Property

Purchase Price$ 895,000

Rent$ 9,000/mo

Monthly Cash Flow$ 2,328

Cash on Cash Return11.78 %

Financial Analysis

Cash on Cash Return	11.78 %
Internal Rate of Return (IRR)	18.01 %
Capitalization Rate	8.81 %
Gross Rent Multiplier (GRM)	8.29
Debt-coverage Ratio (DCR)	1.55
Operating Expense Ratio (OER)	26.99 %

Financial Breakdown

Purchase Price	$ 895,000
Purchase Costs	$ 13,500
Repair/Construction Costs	$ 0
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 908,500
Financing	$ 671,250
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 237,250
Cash at Closing Cash at Closing This number includes down payment and loan points. Cash at Closing This number includes down payment and loan points.	$ 223,750
Cash During Rehab Cash During Rehab Shows the cash amount remaining to fund the purchase and rehab/construction. Cash During Rehab Shows the cash amount remaining to fund the purchase and rehab/construction.	$ 13,500

Operating Analysis

Rent	$ 9,000/mo
Gross Operating Income (GOI)	$ 108,000
Total Expenses	$ 29,148
Net Operating Income (NOI)	$ 78,852
Annual Debt Service	$ 50,913
Cash Flow Before Taxes (CFBT)	$ 27,939
Income Tax Liability	$ 2,351
Cash Flow After Taxes (CFAT)	$ 25,588

Mayflower Lakeside is located between Mayflower Mountain Resort's new base village and the Jordanelle Reservoir. This new development is 5 years in the making with beautiful contemporary design and finishes. There are 12 residences in this building and all are 3-bedrooms, situated on 1 of 3 elevator serviced floors, above secure underground assigned parking. They come ''standard'' with Viking appliances, and other finishes of a similar quality. Depending on the location in the building, their residences will have views of the Jordanelle, or views of the mountains, or both.

Purchase Price	$ 895,000
Address	Helling Cir , Heber City, 84032, UT
MLS^® #	1821621
Listing Agent	Mark Sletten
Listing Broker	Engel & Volkers Park City
Year Built	2022
Type	Condominium
Size	1585 SF
Bedrooms	3
Bathrooms	2

Annual Property Operating Data

Incomes		% of GOI
Gross Scheduled Income Gross Scheduled Income (GSI) Represents the total of monthly rents for the particular property, including the potential rents from vacant units and uncollectable rents. Gross Scheduled Income (GSI) Represents the total of monthly rents for the particular property, including the potential rents from vacant units and uncollectable rents.	$ 108,000
Total Gross Income	$ 108,000
Vacancy loss Vacancy and Credit Loss Part of the potential rental income that is lost because of unoccupied units or uncollectable rent from tenants. Vacancy and Credit Loss Part of the potential rental income that is lost because of unoccupied units or uncollectable rent from tenants.	$ 0
Gross Operating Income Gross Operating Income (GOI) An actual income which is expected to be collected in the property. Gross Operating Income (GOI) An actual income which is expected to be collected in the property.	$ 108,000	100.00 %
Expenses Operating Expenses Expenses necessary for maintaining the property and ensuring its continued ability to produce income (doesn't include mortgage payments or depreciation). Operating Expenses Expenses necessary for maintaining the property and ensuring its continued ability to produce income (doesn't include mortgage payments or depreciation).
Property manager	$ 16,200	15.00 %
Utilities	$ 3,600	3.33 %
Insurance	$ 1,000	0.93 %
Property tax	$ 3,800	3.52 %
Association fees	$ 4,548	4.21 %
Total Expenses	$ 29,148	26.99 %
Net Operating Income Net Operating Income (NOI) Important measurement calculated as gross operating income minus operating expenses. Net Operating Income (NOI) Important measurement calculated as gross operating income minus operating expenses.	$ 78,852	73.01 %

Cash Flow (Year 1)

Net Operating Income	$ 78,852	73.01 %
Annual Debt Service	$ 50,913	47.14 %
Cash Flow Before Taxes (CFBT) Cash Flow All the inflows and outflows of cash for a certain property (including mortgage payments). We can calculate cash flow before taxes (CFBT) or cash flow after taxes (CFAT) which is CFBT minus any tax liability arising from the operation of the property. Cash Flow All the inflows and outflows of cash for a certain property (including mortgage payments). We can calculate cash flow before taxes (CFBT) or cash flow after taxes (CFAT) which is CFBT minus any tax liability arising from the operation of the property.	$ 27,939	25.87 %
Income Tax Liability	$ 2,351	2.18 %
Cash Flow After Taxes (CFAT) Cash Flow All the inflows and outflows of cash (including mortgage payments). We can calculate cash flow before taxes (CFBT) or cash flow after taxes (CFAT) which is CFBT minus any tax liability arising from the operation of the property. Cash Flow All the inflows and outflows of cash (including mortgage payments). We can calculate cash flow before taxes (CFBT) or cash flow after taxes (CFAT) which is CFBT minus any tax liability arising from the operation of the property.	$ 25,588	23.69 %

Operating Ratios

Operating Expense Ratio Operating Expense Ratio Ratio of the operating expenses to the gross operating income (GOI). Operating Expense Ratio Ratio of the operating expenses to the gross operating income (GOI).	26.99 %
Break-Even Ratio Break-Even Ratio (BER) Another benchmark used by mortgage lenders, estimating how vulnerable is a certain property to defaulting on its mortgage if part of the rental income is declined. Most of the lenders are looking for BER of 85% or less. Break-Even Ratio (BER) Another benchmark used by mortgage lenders, estimating how vulnerable is a certain property to defaulting on its mortgage if part of the rental income is declined. Most of the lenders are looking for BER of 85% or less.	74.13 %

Financial Measures

Net Present Value Net Present Value (NPV) Probably the best measure of any investment thanks to its complexity; taking into account all future cash flows including the selling price, and it converts all these amounts to their present values using discount rate required by the investor. More information and an example on the blog. Net Present Value (NPV) Probably the best measure of any investment thanks to its complexity; taking into account all future cash flows including the selling price, and it converts all these amounts to their present values using discount rate required by the investor. More information and an example on the blog.	$ 154,191
Internal Rate of Return Internal Rate of Return (IRR) Rate which an investment will return over the estimated period of ownership. It is in fact the discount rate that produces NPV of zero. Internal Rate of Return (IRR) Rate which an investment will return over the estimated period of ownership. It is in fact the discount rate that produces NPV of zero.	18.01 %
Profitability Index Profitability Index Similar to NPV, also calculates with the present values of future cash flows and discount rate. It shows whether the present value of the cash flows is worth the initial investment. Good investment should be above 1.0 Profitability Index Similar to NPV, also calculates with the present values of future cash flows and discount rate. It shows whether the present value of the cash flows is worth the initial investment. Good investment should be above 1.0	1.65
Annual Depreciation	$ 26,036

Holding period of 5 years and discount rate of 5.00% were used for calculation of NPV and IRR. The rest of the financial measures are for the 1st year only and therefore don't provide such an exact information.

Investment Return Ratios

Cash on Cash Return Cash on Cash Return Ratio between annual cash flow before taxes and the total initial investment, expressed as a percentage. It does not take in account the future value of money. Cash on Cash Return Ratio between annual cash flow before taxes and the total initial investment, expressed as a percentage. It does not take in account the future value of money.	11.78 %
Return on Investment Return on Investment Very similar to Cash on Cash Return, but also takes in account appreciation of the property in the first year. Return on Investment Very similar to Cash on Cash Return, but also takes in account appreciation of the property in the first year.	23.09 %
Capitalization Rate Capitalization Rate Calculated as ratio of the net operating income and the value of the property. Capitalization Rate Calculated as ratio of the net operating income and the value of the property.	8.81 %
Gross Rental Yield Gross Rental Yield Used for a particular property or also as a market indicator when using median values of rent and house prices - counted from gross scheduled rent and initial investment. Gross Rental Yield Used for a particular property or also as a market indicator when using median values of rent and house prices - counted from gross scheduled rent and initial investment.	12.07 %
Gross Rent Multiplier Gross Rent Multiplier (GRM) Counted as a ratio of market value of the property and gross scheduled income. Gross Rent Multiplier (GRM) Counted as a ratio of market value of the property and gross scheduled income.	8.29

Financing
Down Payment		$ 223,750
Loan		$ 671,250
Loan to Value Ratio Loan to Value Ratio Shows sum of all purchase and rehab loans divided by purchase price. Loan to Value Ratio Shows sum of all purchase and rehab loans divided by purchase price.		75.00 %
Loan to Cost Ratio Loan to Cost Ratio Shows sum of all purchase and rehab loans to construction cost (purchase price + repairs). Loan to Cost Ratio Shows sum of all purchase and rehab loans to construction cost (purchase price + repairs).		75.00 %
Debt Coverage Ratio		1.55

Loan Financing of: Purchase price ($ 895,000)
Type	Amortized
Loan Amount	$ 671,250
Down payment (25%)	$ 223,750
Amortization	30 years
Interest Rate	6.50 %
Monthly Payment	$ 4,242.76

This chart shows the process of accumulation of investor's equity. There is some equity created right at the beginning with the rehab/construction and later investor's equity is rising by paying off the principal of the loan and also by appreciation over the years. All the green parts is the cummulative equity belonging to the investor and the red part belongs to the lender.

Year	0	1	2	3	4	5
Operational Analysis
Gross Scheduled Income	0	108,000	110,160	112,363	114,610	116,903
Vacancy Loss	0	0	0	0	0	0
Gross Operating Income	0	108,000	110,160	112,363	114,610	116,903
Expenses	0	29,148	29,731	30,326	30,932	31,551
Net Operating Income	0	78,852	80,429	82,038	83,678	85,352
Loan Payment	0	50,913	50,913	50,913	50,913	50,913
Payment Interest Part	0	43,410	42,908	42,372	41,800	41,189
Payment Principal Part	0	7,503	8,005	8,541	9,113	9,724
Cash Flow
Repairs/Construction	0	0	0	0	0	0
Cash Flow Before Taxes	-237,250	27,939	29,516	31,125	32,765	34,439
Depreciation	0	26,036	26,036	26,036	26,036	26,036
Taxes	0	2,351	2,871	3,407	3,961	4,532
Cash Flow After Taxes	-237,250	25,588	26,645	27,717	28,805	29,907

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 5 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 1,037,550
Cap Rate (8.81%) & NOI	$ 968,807
Gross Rent Multiplier	$ 969,123

Sale Proceeds

Projected Selling Price	$ 1,037,550
Costs of Sale (6.00%)	$ 62,253
1. Loan Balance Payoff	$ 628,364
Net Sale Proceeds Before Tax	$ 346,933

In the resale analysis we do not include any calculation for taxes that might be owed on sale of the property. The tax laws for the resale are rather complex and subjected to frequent changes.

Net Assets and Yield

Net Assets
Sale Proceeds Before Tax	$ 346,933
Investor Cash Outlay	$ 237,250
Net Assets	$ 109,683
Average Yield
Annual Net Assets	$ 21,937
Average Cash Flow (After Taxes)	$ 21,751
Average Annual Gain (After Taxes)	$ 43,687
Average Annual Yield (After Taxes)	4.88 %

This charts shows Net Present Value (NPV) when property is sold in various years, i.e. when sold in 5th year, the NPV is calculated from 5 years of Cash Flow (including the selling price) and this NPV is displayed in year 5. Optimal holding period can be estimated, using this method - when NPV is the highest. Please note that appreciation growth can change these numbers greatly. It sometimes makes sense to sell the property even before the end of the mortgage term.

Property Report: Helling Cir, Heber City RENTAL

Property Report :

Helling Cir, Heber City, UT 84032

Executive Summary