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Real Estate Analysis
Property Report: 1012Wb RENTAL
Property Report :
1012Wb
1012, S, AL
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Real Estate Analysis
Created on: Apr 14, 2025
Author: Henco Vest
Executive Summary
1012, S, AL
Singlefamily:
Investment strategy: Rental Property
Purchase Price$usd 59,000
Rent$usd 2,165/mo
Monthly Cash Flow$usd 666
Cash on Cash Return38.34 %
Financial Analysis
| Cash on Cash Return | 38.34 % |
| Internal Rate of Return (IRR) | 26.37 % |
| Capitalization Rate | 22.02 % |
| Gross Rent Multiplier (GRM) | 2.27 |
| Debt-coverage Ratio (DCR) | 2.60 |
| Operating Expense Ratio (OER) | 50.00 % |
Financial Breakdown
| Purchase Price | $usd 59,000 |
| Purchase Costs | $usd 3,134 |
| Repair/Construction Costs | $usd 0 |
|
Total Capital Needed
Total Capital Needed
Includes all projects costs (except selling costs).
Total Capital Needed
Includes all projects costs (except selling costs).
|
$usd 62,134 |
| Financing | $usd 41,300 |
Total Cash Needed
Cash out of Pocket
Shows rehabber's cash outlay.
Cash out of Pocket
Shows rehabber's cash outlay.
|
$usd 20,834 |
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.
|
$usd 17,700 |
|
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.
|
$usd 3,134 |
Operating Analysis
| Rent | $usd 2,165/mo |
| Gross Operating Income (GOI) | $usd 25,980 |
| Total Expenses | $usd 12,990 |
| Net Operating Income (NOI) | $usd 12,990 |
| Annual Debt Service | $usd 5,003 |
| Cash Flow Before Taxes (CFBT) | $usd 7,987 |
| Income Tax Liability | $usd 2,294 |
| Cash Flow After Taxes (CFAT) | $usd 5,693 |
Property Description
| Purchase Price | $usd 59,000 |
| Address | 1012 , S, AL |
| Type | Singlefamily |
1012 S, AL
-
Singlefamily
Bldg type
Operating Analysis
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.
|
$usd 25,980 | |
| Total Gross Income | $usd 25,980 | |
|
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.
|
$usd 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.
|
$usd 25,980 | 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).
|
||
| 50% rule | $usd 12,990 | 50.00 % |
| Total Expenses | $usd 12,990 | 50.00 % |
|
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.
|
$usd 12,990 | 50.00 % |
Cash Flow (Year 1)
| Net Operating Income | $usd 12,990 | 50.00 % |
| Annual Debt Service | $usd 5,003 | 19.26 % |
|
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.
|
$usd 7,987 | 30.74 % |
| Income Tax Liability | $usd 2,294 | 8.83 % |
|
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.
|
$usd 5,693 | 21.91 % |
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).
|
50.00 % |
|
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.
|
69.26 % |
Financial Analysis
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.
|
$usd 22,784 |
|
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.
|
26.37 % |
|
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
|
2.09 |
| Annual Depreciation | $usd 1,716 |
Holding period of 10 years and discount rate of 10.00% 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.
|
38.34 % |
|
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.
|
40.46 % |
|
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.
|
22.02 % |
|
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.
|
44.03 % |
|
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.
|
2.27 |
Financing Overview
| Financing | ||
|---|---|---|
| Down Payment | $usd 17,700 | |
| Loan | $usd 41,300 | |
|
Loan to Value Ratio
Loan to Value Ratio
Shows sum of all purchase and rehab loans divided by purchase price.
Loan to Value Ratio
Shows sum of all purchase and rehab loans divided by purchase price.
|
70.00 % | |
|
Loan to Cost Ratio
Loan to Cost Ratio
Shows sum of all purchase and rehab loans to construction cost (purchase price + repairs).
Loan to Cost Ratio
Shows sum of all purchase and rehab loans to construction cost (purchase price + repairs).
|
70.00 % | |
| Debt Coverage Ratio | 2.60 | |
|
Loan
Financing of: Purchase price ($usd 59,000) |
|
|---|---|
| Type | Amortized |
| Loan Amount | $usd 41,300 |
| Down payment (30%) | $usd 17,700 |
| Amortization | 15 years |
| Interest Rate | 8.92 % |
| Monthly Payment | $usd 416.93 |
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.
Long-term Cash Flow Forecast
| Year | |
|---|---|
| Operational Analysis | |
| Gross Scheduled Income | |
| Vacancy Loss | |
| Gross Operating Income | |
| Expenses | |
| Net Operating Income | |
| Loan Payment | |
| Payment Interest Part | |
| Payment Principal Part | |
| Cash Flow | |
| Repairs/Construction | |
| Cash Flow Before Taxes | |
| Depreciation | 0 |
| Taxes | |
| Cash Flow After Taxes |
Note: All amounts in the table above are in $usd
Resale Analysis
Resale Price Evaluation Methods
The property is sold after 10 years. Below is the resale price calculated using different methods.
| Gross Rent Multiplier | $usd 61,682 |
| Appreciation (0.75%) | $usd 63,577 |
| Cap Rate (7.75%) & NOI | $usd 131,920 |
Sale Proceeds
| Projected Selling Price | $usd 61,682 |
| Costs of Sale (7.00%) | $usd 4,318 |
| Net Sale Proceeds Before Tax | $usd 37,242 |
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 | $usd 37,242 |
| Investor Cash Outlay | $usd 20,834 |
| Net Assets | $usd 16,408 |
| Average Yield | |
| Annual Net Assets | $usd 1,641 |
| Average Cash Flow (After Taxes) | $usd 0 |
| Average Annual Gain (After Taxes) | $usd 0 |
| Average Annual Yield (After Taxes) | 0.00 % |
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.
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