1031 Bond St, Macon GA 31201

1031 Bond St, Macon, GA 31201

Multifamily:

Investment strategy: Rental Property

Purchase Price$ 200,000

Rent$ 2,350/mo

Monthly Cash Flow$ 834

Cash on Cash Return22.85 %

Financial Analysis

Cash on Cash Return	22.85 %
Internal Rate of Return (IRR)	34.55 %
Capitalization Rate	9.73 %
Gross Rent Multiplier (GRM)	7.98
Debt-coverage Ratio (DCR)	1.84
Operating Expense Ratio (OER)	19.95 %
After Repair Value	$ 225,000
Profit/Equity From Rehab	$ 21,200

Financial Breakdown

Purchase Price	$ 200,000
Purchase Costs	$ 3,800
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).	$ 203,800
Financing	$ 160,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 43,800
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.	$ 41,600
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.	$ 2,200

Operating Analysis

Rent	$ 2,350/mo
Gross Operating Income (GOI)	$ 27,354
Total Expenses	$ 5,458
Net Operating Income (NOI)	$ 21,896
Annual Debt Service	$ 11,889
Cash Flow Before Taxes (CFBT)	$ 10,007
Income Tax Liability	$ 2,345
Cash Flow After Taxes (CFAT)	$ 7,662

Purchase Price	$ 200,000
Address	1031 Bond St , Macon, 31201, GA
Type	Multifamily
Number of Units	4

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.	$ 28,200
Total Gross Income	$ 28,200
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.	$ 846
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.	$ 27,354	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).
Utilities	$ 1,200	4.39 %
Insurance	$ 650	2.38 %
Repairs	$ 1,368	5.00 %
Property tax	$ 2,000	7.31 %
Power	$ 240	0.88 %
Total Expenses	$ 5,458	19.95 %
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.	$ 21,896	80.05 %

Cash Flow (Year 1)

Net Operating Income	$ 21,896	80.05 %
Annual Debt Service	$ 11,889	43.46 %
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.	$ 10,007	36.58 %
Income Tax Liability	$ 2,345	8.57 %
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.	$ 7,662	28.01 %

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).	19.95 %
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.	63.42 %

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.	$ 80,567
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.	34.55 %
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	2.84
Annual Depreciation	$ 5,818

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.	22.85 %
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.	36.55 %
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.	9.73 %
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.	14.10 %
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.	7.98

Financing		% of ARV
Down Payment	$ 40,000	17.78 %
Loan	$ 160,000	71.11 %
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.		80.00 %
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).		80.00 %
Debt Coverage Ratio		1.84

Loan Financing of: Purchase price ($ 200,000)
Type	Amortized
Loan Amount	$ 160,000
Down payment (20%)	$ 40,000
Amortization	20 years
Interest Rate	4.25 %
Monthly Payment	$ 990.78

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	28,200	28,764	29,339	29,926	30,525
Vacancy Loss	0	846	863	880	898	916
Gross Operating Income	0	27,354	27,901	28,459	29,028	29,609
Expenses	0	5,458	5,567	5,678	5,792	5,908
Net Operating Income	0	21,896	22,334	22,781	23,237	23,701
Loan Payment	0	11,889	11,889	11,889	11,889	11,889
Payment Interest Part	0	6,700	6,475	6,240	5,995	5,740
Payment Principal Part	0	5,190	5,415	5,649	5,894	6,149
Cash Flow
Repairs/Construction	0	0	0	0	0	0
Cash Flow Before Taxes	-43,800	10,007	10,445	10,892	11,347	11,812
Depreciation	0	5,818	5,818	5,818	5,818	5,818
Taxes	0	2,345	2,510	2,681	2,856	3,036
Cash Flow After Taxes	-43,800	7,662	7,935	8,211	8,491	8,776

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%)	$ 260,837
Cap Rate (9.73%) & NOI	$ 243,590
Gross Rent Multiplier	$ 243,586

Sale Proceeds

Projected Selling Price	$ 260,837
Costs of Sale (6.00%)	$ 15,650
1. Loan Balance Payoff	$ 131,703
Net Sale Proceeds Before Tax	$ 113,484

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	$ 113,484
Investor Cash Outlay	$ 43,800
Net Assets	$ 69,684
Average Yield
Annual Net Assets	$ 13,937
Average Cash Flow (After Taxes)	$ 6,460
Average Annual Gain (After Taxes)	$ 20,397
Average Annual Yield (After Taxes)	10.20 %

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: 1031 Bond St, Macon RENTAL

Property Report :

1031 Bond St, Macon, GA 31201

Executive Summary