Zen Senior Living Diamond Valley: 1000 S Gilbert St # I_135, Hemet CA 92543

1000 S Gilbert St # I_135, Hemet, CA 92543

Multifamily:

Investment strategy: Rental Property

Zen Diamond Valley is conveniently located just off of Highway 74, less than 15 minutes away from Diamond Valley Lake, and within walking distance of shopping plazas and restaurants. Our one and two-bedroom apartment homes feature walk-in closets and spacious bedrooms for the ultimate in comfort and convenience. Enjoy a refreshing swim in the pool, relax in the comfort of the soothing spa, or visit one of the nearby parks or recreational facilities.

Purchase Price$ 28,336,784

Rent$ 131,653/mo

Monthly Cash Flow$ 30,371

Cash on Cash Return4.29 %

Financial Analysis

Cash on Cash Return	4.29 %
Internal Rate of Return (IRR)	12.91 %
Capitalization Rate	5.30 %
Gross Rent Multiplier (GRM)	17.94
Debt-coverage Ratio (DCR)	1.32
Operating Expense Ratio (OER)	0.00 %

Financial Breakdown

Purchase Price	$ 28,336,784
Purchase Costs	$ 0
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).	$ 28,336,784
Financing	$ 19,835,749
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 8,501,035
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.	$ 8,501,035
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.	$ 0

Operating Analysis

Rent	$ 131,653/mo
Gross Operating Income (GOI)	$ 1,500,844
Total Expenses	$ 0
Net Operating Income (NOI)	$ 1,500,844
Annual Debt Service	$ 1,136,387
Cash Flow Before Taxes (CFBT)	$ 364,457
Income Tax Liability	$ -27,643
Cash Flow After Taxes (CFAT)	$ 392,100

Zen Senior Living Diamond Valley - an incredible opportunity to get the best of Hemet living. Comfortably located in Hemet's Outer San Jacinto area, moving to our community gives you a variety of nearby highlights. Our friendly and professional leasing staff is waiting to show you all that our community has in store. Choose from 1 to 2 bedroom floorplan options with prices ranging from $1,094 to $1,244.
Zen Senior Living Diamond Valley Apartments is located in the 92543 Zip code of the Outer San Jacinto Neighborhood in Hemet, CA. This community is professionally managed.

Purchase Price	$ 28,336,784
Address	1000 S Gilbert St # I_135 , Hemet, 92543, CA
Type	Multifamily
Number of Units	177

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.	$ 1,579,836
Total Gross Income	$ 1,579,836
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.	$ 78,992
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.	$ 1,500,844	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).
Total Expenses	$ 0	0.00 %
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.	$ 1,500,844	100.00 %

Cash Flow (Year 1)

Net Operating Income	$ 1,500,844	100.00 %
Annual Debt Service	$ 1,136,387	75.72 %
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.	$ 364,457	24.28 %
Income Tax Liability	$ -27,643	-1.84 %
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.	$ 392,100	26.13 %

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).	0.00 %
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.	75.72 %

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.	$ 7,534,207
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.	12.91 %
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	1.89
Annual Depreciation	$ 824,343

Holding period of 10 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.	4.29 %
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.	14.29 %
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.	5.30 %
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.	5.58 %
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.	17.94

Financing
Down Payment		$ 8,501,035
Conventional		$ 19,835,749
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.		70.00 %
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).		70.00 %
Debt Coverage Ratio		1.32

Conventional Financing of: Purchase price ($ 28,336,784)
Type	Amortized
Loan Amount	$ 19,835,749
Down payment (30%)	$ 8,501,035
Amortization	30 years
Interest Rate	4.00 %
Monthly Payment	$ 94,698.90

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	6	7	8	9	10
Operational Analysis
Gross Scheduled Income	0	1,579,836	1,611,433	1,643,661	1,676,535	1,710,065	1,744,267	1,779,152	1,814,735	1,851,030	1,888,050
Vacancy Loss	0	78,992	80,572	82,183	83,827	85,503	87,213	88,958	90,737	92,551	94,403
Gross Operating Income	0	1,500,844	1,530,861	1,561,478	1,592,708	1,624,562	1,657,053	1,690,194	1,723,998	1,758,478	1,793,648
Expenses	0	0	0	0	0	0	0	0	0	0	0
Net Operating Income	0	1,500,844	1,530,861	1,561,478	1,592,708	1,624,562	1,657,053	1,690,194	1,723,998	1,758,478	1,793,648
Loan Payment	0	1,136,387	1,136,387	1,136,387	1,136,387	1,136,387	1,136,387	1,136,387	1,136,387	1,136,387	1,136,387
Payment Interest Part	0	787,072	772,840	758,029	742,614	726,571	709,875	692,498	674,413	655,592	636,003
Payment Principal Part	0	349,315	363,546	378,358	393,773	409,816	426,512	443,889	461,974	480,795	500,383
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-8,501,035	364,457	394,474	425,092	456,321	488,175	520,666	553,808	587,611	622,091	657,261
Depreciation	0	824,343	824,343	824,343	824,343	824,343	824,343	824,343	824,343	824,343	824,343
Taxes	0	-27,643	-16,581	-5,223	6,438	18,412	30,709	43,338	56,311	69,636	83,325
Cash Flow After Taxes	-8,501,035	392,100	411,055	430,315	449,883	469,763	489,958	510,469	531,301	552,456	573,936

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 10 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 38,082,268
Cap Rate (5.30%) & NOI	$ 33,842,410
Gross Rent Multiplier	$ 33,871,622

Sale Proceeds

Projected Selling Price	$ 38,082,268
Costs of Sale (6.00%)	$ 2,284,936
1. Loan Balance Payoff	$ 15,627,388
Net Sale Proceeds Before Tax	$ 20,169,944

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	$ 20,169,944
Investor Cash Outlay	$ 8,501,035
Net Assets	$ 11,668,909
Average Yield
Annual Net Assets	$ 1,166,891
Average Cash Flow (After Taxes)	$ 423,730
Average Annual Gain (After Taxes)	$ 1,590,621
Average Annual Yield (After Taxes)	5.61 %

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: Zen Senior Living Diamond Valley RENTAL

Property Report :

Zen Senior Living Diamond Valley

1000 S Gilbert St # I_135, Hemet, CA 92543

Executive Summary

1000 S Gilbert St # I_135, Hemet, CA 92543

Financial Analysis

Financial Breakdown

Total Capital Needed

Total Capital Needed

Cash out of Pocket

Cash out of Pocket

Cash at Closing

Cash at Closing

Cash During Rehab

Cash During Rehab

Operating Analysis

Property Description

Operating Analysis

Annual Property Operating Data

Gross Scheduled Income (GSI)

Gross Scheduled Income (GSI)

Vacancy and Credit Loss

Vacancy and Credit Loss

Gross Operating Income (GOI)

Gross Operating Income (GOI)

Operating Expenses

Operating Expenses

Net Operating Income (NOI)

Net Operating Income (NOI)

Cash Flow (Year 1)

Cash Flow

Cash Flow

Cash Flow

Cash Flow

Operating Ratios

Operating Expense Ratio

Operating Expense Ratio

Break-Even Ratio (BER)

Break-Even Ratio (BER)

Financial Analysis

Financial Measures

Net Present Value (NPV)

Net Present Value (NPV)

Internal Rate of Return (IRR)

Internal Rate of Return (IRR)

Profitability Index

Profitability Index

Investment Return Ratios

Cash on Cash Return

Cash on Cash Return

Return on Investment

Return on Investment

Capitalization Rate

Capitalization Rate

Gross Rental Yield

Gross Rental Yield

Gross Rent Multiplier (GRM)

Gross Rent Multiplier (GRM)

Financing Overview

Loan to Value Ratio

Loan to Value Ratio

Loan to Cost Ratio

Loan to Cost Ratio

Long-term Cash Flow Forecast

Resale Analysis

Resale Price Evaluation Methods

Sale Proceeds

Net Assets and Yield

Photos