MILL: 1117 Mill St, Reading OH 45215

1117 Mill St, Reading, OH 45215

Multifamily:

Year built: 1865, Size: 1638 SF

Investment strategy: Rental Property

Purchase Price$ 165,000

Rent$ 1,950/mo

Monthly Cash Flow$ 1,049

Cash on Cash Return36.50 %

Financial Analysis

Cash on Cash Return	36.50 %
Internal Rate of Return (IRR)	34.79 %
Capitalization Rate	12.08 %
Gross Rent Multiplier (GRM)	7.05
Debt-coverage Ratio (DCR)	2.71
Operating Expense Ratio (OER)	12.16 %

Financial Breakdown

Purchase Price	$ 165,000
Purchase Costs	$ 1,500
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).	$ 166,500
Financing	$ 132,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 34,500
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.	$ 33,000
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.	$ 1,500

Operating Analysis

Rent	$ 1,950/mo
Gross Operating Income (GOI)	$ 22,698
Total Expenses	$ 2,760
Net Operating Income (NOI)	$ 19,938
Annual Debt Service	$ 7,345
Cash Flow Before Taxes (CFBT)	$ 12,593
Income Tax Liability	$ 2,554
Cash Flow After Taxes (CFAT)	$ 10,039

Beautiful 2 units duplex 2bedrooms & 1full unit & 1bedroom & 1Full Bathroom unit. Completely renovated & updated with New Carpet & flooring , Completely remodeled kitchen with stainless steel appliances , Professionally painted , Completely Updated Bathrooms , New light fixtures throughout, New roof, New water heater, New HVAC & AC units, New gutters, New deck.agent owned

Purchase Price	$ 165,000
Address	1117 Mill St , Reading, 45215, OH
MLS^® #	1722601
Listing Agent	Hossam Elsayed
Listing Broker	Emerald Home Advisors LLC
Year Built	1865
Type	Multifamily
Number of Units
Size	1638 SF

Property History

Date	Price	Change	Event
5/27/2021
7/26/2000
3/5/1991

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.	$ 23,400
Total Gross Income	$ 23,400
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.	$ 702
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.	$ 22,698	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).
WATER/SEWER	$ 912	4.02 %
Property tax	$ 1,320	5.82 %
Insurance	$ 528	2.33 %
Total Expenses	$ 2,760	12.16 %
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.	$ 19,938	87.84 %

Cash Flow (Year 1)

Net Operating Income	$ 19,938	87.84 %
Annual Debt Service	$ 7,345	32.36 %
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.	$ 12,593	55.48 %
Income Tax Liability	$ 2,554	11.25 %
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.	$ 10,039	44.23 %

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).	12.16 %
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.	44.52 %

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.	$ 116,819
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.	34.79 %
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	4.39
Annual Depreciation	$ 4,800

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.	36.50 %
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.	50.85 %
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.	12.08 %
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.	14.18 %
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.	7.05

Financing
Down Payment		$ 33,000
Loan		$ 132,000
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		2.71

Loan Financing of: Purchase price ($ 165,000)
Type	Amortized
Loan Amount	$ 132,000
Down payment (20%)	$ 33,000
Amortization	30 years
Interest Rate	3.76 %
Monthly Payment	$ 612.06

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	23,400	23,868	24,345	24,832	25,329	25,836	26,352	26,879	27,417	27,965
Vacancy Loss	0	702	716	730	745	760	775	791	806	823	839
Gross Operating Income	0	22,698	23,152	23,615	24,087	24,569	25,060	25,562	26,073	26,594	27,126
Expenses	0	2,760	2,815	2,872	2,929	2,988	3,047	3,108	3,170	3,234	3,298
Net Operating Income	0	19,938	20,337	20,744	21,158	21,582	22,013	22,453	22,903	23,361	23,828
Loan Payment	0	7,345	7,345	7,345	7,345	7,345	7,345	7,345	7,345	7,345	7,345
Payment Interest Part	0	4,922	4,829	4,733	4,633	4,529	4,421	4,310	4,193	4,073	3,948
Payment Principal Part	0	2,423	2,516	2,612	2,712	2,816	2,923	3,035	3,151	3,272	3,397
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-34,500	12,593	12,992	13,399	13,814	14,237	14,668	15,109	15,558	16,016	16,483
Depreciation	0	4,800	4,800	4,800	4,800	4,800	4,800	4,800	4,800	4,800	4,800
Taxes	0	2,554	2,677	2,803	2,931	3,063	3,198	3,336	3,477	3,622	3,770
Cash Flow After Taxes	-34,500	10,039	10,315	10,596	10,882	11,174	11,470	11,773	12,081	12,394	12,713

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%)	$ 221,746
Cap Rate (12.08%) & NOI	$ 197,250
Gross Rent Multiplier	$ 197,154

Sale Proceeds

Projected Selling Price	$ 221,746
Costs of Sale (6.00%)	$ 13,305
1. Loan Balance Payoff	$ 103,143
Net Sale Proceeds Before Tax	$ 105,298

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	$ 105,298
Investor Cash Outlay	$ 34,500
Net Assets	$ 70,798
Average Yield
Annual Net Assets	$ 7,080
Average Cash Flow (After Taxes)	$ 10,072
Average Annual Gain (After Taxes)	$ 17,152
Average Annual Yield (After Taxes)	10.40 %

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: MILL RENTAL

Property Report :

MILL

1117 Mill St, Reading, OH 45215

Executive Summary

1117 Mill St, Reading, OH 45215

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

Property History

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