1126 W 340 S Unit 74, American Fork UT 84003

1126 W 340 S Unit 74, American Fork, UT 84003

Condominium: 3 bedrooms , 3 bathrooms

Year built: 2022, Size: 1581 SF

Investment strategy: Rental Property

Purchase Price$ 418,990

Rent$ 2,100/mo

Monthly Cash Flow$ 164

Cash on Cash Return0.92 %

Financial Analysis

Cash on Cash Return	0.92 %
Internal Rate of Return (IRR)	6.74 %
Capitalization Rate	4.07 %
Gross Rent Multiplier (GRM)	16.63
Debt-coverage Ratio (DCR)	1.13
Operating Expense Ratio (OER)	31.72 %

Financial Breakdown

Purchase Price	$ 418,990
Purchase Costs	$ 4,189
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).	$ 423,179
Financing	$ 209,495
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 213,684
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.	$ 209,495
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.	$ 4,189

Operating Analysis

Rent	$ 2,100/mo
Gross Operating Income (GOI)	$ 24,948
Total Expenses	$ 7,913
Net Operating Income (NOI)	$ 17,035
Annual Debt Service	$ 15,072
Cash Flow Before Taxes (CFBT)	$ 1,963
Income Tax Liability	$ -1,913
Cash Flow After Taxes (CFAT)	$ 3,876

ESTIMATED COMPLETION SEPTEMBER Beautiful 3-story Emery-E Townhome with 1-car garage, South of Pioneer Crossing in American Fork. Modern exterior style, flex/bedroom, and full bathroom on entry-level. Open family/kitchen layout, 9' ceiling on the 2nd level, standard kitchen layout, cabinets molding, stainless steel gas appliances, quartz countertop in kitchen and bathrooms, laminate flooring throughout the kitchen, dining, and family room. Two bedrooms including a bedroom suite with a private bath with a walk-in closet, and a junior suite with a 2nd full bathroom, and laundry closet on the third level. Use DHI Mortgage and receive $5, 000 toward closing costs. The actual home may differ in color, material, and/or options. Pictures are of a finished home of the same floor plan and the available home may contain different options, upgrades, and exterior color and/or elevation style. Square footage figures are provided as a courtesy estimate only and were obtained from building plans. No representation or warranties are made regarding school districts and assignments; please conduct your own investigation regarding current/future school boundaries.

Purchase Price	$ 418,990
Address	1126 W 340 S Unit 74 , American Fork, 84003, UT
MLS^® #	1822066
Listing Agent	Jeffrey Anderson
Listing Broker	D.R. Horton Inc.
Year Built	2022
Type	Condominium
Size	1581 SF
Bedrooms	3
Bathrooms	3

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.	$ 25,200
Total Gross Income	$ 25,200
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.	$ 252
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.	$ 24,948	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	$ 2,220	8.90 %
Repairs	$ 748	3.00 %
Property tax	$ 2,304	9.24 %
Association fees	$ 1,800	7.22 %
Insurance	$ 840	3.37 %
Total Expenses	$ 7,913	31.72 %
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.	$ 17,035	68.28 %

Cash Flow (Year 1)

Net Operating Income	$ 17,035	68.28 %
Annual Debt Service	$ 15,072	60.42 %
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.	$ 1,963	7.87 %
Income Tax Liability	$ -1,913	-7.67 %
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.	$ 3,876	15.54 %

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).	31.72 %
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.	92.13 %

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.	$ 106,296
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.	6.74 %
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	1.50
Annual Depreciation	$ 12,189

Holding period of 30 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.	0.92 %
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.	6.80 %
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.	4.07 %
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.	6.01 %
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.	16.63

Financing
Down Payment		$ 209,495
Conventional		$ 209,495
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.		50.00 %
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).		50.00 %
Debt Coverage Ratio		1.13

Conventional Financing of: Purchase price ($ 418,990)
Type	Amortized
Loan Amount	$ 209,495
Down payment (50%)	$ 209,495
Amortization	30 years
Interest Rate	6.00 %
Monthly Payment	$ 1,256.03

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	11	12	13	14	15	16	17	18	19	20	21	22	23	24	25	26	27	28	29	30
Operational Analysis
Gross Scheduled Income	0	25,200	25,704	26,218	26,742	27,277	27,823	28,379	28,947	29,526	30,116	30,719	31,333	31,960	32,599	33,251	33,916	34,594	35,286	35,992	36,712	37,446	38,195	38,959	39,738	40,533	41,343	42,170	43,014	43,874	44,751
Vacancy Loss	0	252	257	262	267	273	278	284	289	295	301	307	313	320	326	333	339	346	353	360	367	374	382	390	397	405	413	422	430	439	448
Gross Operating Income	0	24,948	25,447	25,956	26,475	27,005	27,545	28,096	28,657	29,231	29,815	30,411	31,020	31,640	32,273	32,918	33,577	34,248	34,933	35,632	36,345	37,071	37,813	38,569	39,341	40,127	40,930	41,748	42,583	43,435	44,304
Expenses	0	7,913	8,071	8,232	8,397	8,565	8,736	8,911	9,089	9,271	9,457	9,646	9,839	10,035	10,236	10,441	10,650	10,863	11,080	11,301	11,527	11,758	11,993	12,233	12,478	12,727	12,982	13,241	13,506	13,776	14,052
Net Operating Income	0	17,035	17,376	17,723	18,078	18,439	18,808	19,184	19,568	19,959	20,359	20,766	21,181	21,605	22,037	22,478	22,927	23,386	23,853	24,330	24,817	25,313	25,820	26,336	26,863	27,400	27,948	28,507	29,077	29,659	30,252
Loan Payment	0	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072	15,072
Payment Interest Part	0	12,500	12,341	12,173	11,994	11,804	11,602	11,388	11,161	10,920	10,664	10,392	10,103	9,797	9,471	9,126	8,759	8,369	7,956	7,517	7,051	6,556	6,031	5,474	4,882	4,253	3,586	2,877	2,125	1,326	479
Payment Principal Part	0	2,573	2,731	2,900	3,079	3,268	3,470	3,684	3,911	4,153	4,409	4,681	4,969	5,276	5,601	5,947	6,313	6,703	7,116	7,555	8,021	8,516	9,041	9,599	10,191	10,819	11,487	12,195	12,947	13,746	14,594
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-213,684	1,963	2,304	2,651	3,006	3,367	3,736	4,112	4,496	4,887	5,286	5,693	6,109	6,532	6,965	7,405	7,855	8,313	8,781	9,258	9,745	10,241	10,747	11,264	11,790	12,328	12,876	13,435	14,005	14,586	15,180
Depreciation	0	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189	12,189
Taxes	0	-1,913	-1,789	-1,660	-1,526	-1,388	-1,246	-1,098	-945	-787	-624	-454	-278	-95	94	291	495	707	927	1,156	1,394	1,642	1,900	2,168	2,448	2,740	3,043	3,360	3,691	4,036	4,396
Cash Flow After Taxes	-213,684	3,876	4,092	4,311	4,532	4,755	4,982	5,210	5,441	5,674	5,910	6,147	6,387	6,628	6,870	7,115	7,360	7,607	7,854	8,102	8,351	8,599	8,847	9,095	9,342	9,588	9,832	10,074	10,314	10,551	10,783

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 30 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 1,016,999
Cap Rate (4.07%) & NOI	$ 743,289
Gross Rent Multiplier	$ 744,214

Sale Proceeds

Projected Selling Price	$ 1,016,999
Costs of Sale (6.00%)	$ 61,020
Net Sale Proceeds Before Tax	$ 955,979

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	$ 955,979
Investor Cash Outlay	$ 213,684
Net Assets	$ 742,295
Average Yield
Annual Net Assets	$ 24,743
Average Cash Flow (After Taxes)	$ 6,915
Average Annual Gain (After Taxes)	$ 31,658
Average Annual Yield (After Taxes)	7.56 %

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: 1126 W 340 S Unit 74, American Fork RENTAL

Property Report :

1126 W 340 S Unit 74, American Fork, UT 84003

Executive Summary