Main St Phoenixville Mixed Use: 119 Main St, Phoenixville PA 19460

119 Main St, Phoenixville, PA 19460

Commercial (Mixed-Use):

Year built: 1932, Size: 11560 SF

Investment strategy: Rental Property

Purchase Price$ 950,000

Rent$ 25,200/mo

Monthly Cash Flow$ 4,895

Cash on Cash Return14.78 %

Financial Analysis

Cash on Cash Return	14.78 %
Internal Rate of Return (IRR)	22.33 %
Capitalization Rate	6.35 %
Gross Rent Multiplier (GRM)	12.57
Debt-coverage Ratio (DCR)	1.32
Operating Expense Ratio (OER)	16.03 %
After Repair Value	$ 3,800,000
Profit/Equity From Rehab	$ 1,150,000

Financial Breakdown

Purchase Price	$ 950,000
Purchase Costs	$ 0
Repair/Construction Costs	$ 1,700,000
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 2,650,000
Financing	$ 2,252,500
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 397,500
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.	$ 397,500
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	$ 25,200/mo
Gross Operating Income (GOI)	$ 287,280
Total Expenses	$ 46,037
Net Operating Income (NOI)	$ 241,243
Annual Debt Service	$ 182,509
Cash Flow Before Taxes (CFBT)	$ 58,735
Income Tax Liability	$ 19,110
Cash Flow After Taxes (CFAT)	$ 39,625

119 Main St, Phoenixville, PA 19460 is a single family home built in 1932. This property was last sold for $418,000 in 2004. According to the Phoenixville public records, the property at 119 Main St, Phoenixville, PA 19460 has approximately 11560 square feet, with a lot size of 7,841 square feet. Nearby schools include Phoenixville Area Middle School, Phoenixville Area High School and Barkley El School.

Purchase Price	$ 950,000
Address	119 Main St , Phoenixville, 19460, PA
Listing Broker	RE/MAX Action Associates
Year Built	1932
Type	Commercial
Category	Mixed-Use
Size	11560 SF

Property History

Date	Price	Change	Event
10/18/2008
11/8/2006
11/3/2006
2/22/2005
11/22/2004
8/19/2004
5/7/2004
10/10/2001

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.	$ 302,400
Total Gross Income	$ 302,400
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.	$ 15,120
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.	$ 287,280	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	$ 8,618	3.00 %
Utilities	$ 4,800	1.67 %
Insurance	$ 7,600	2.65 %
Repairs	$ 8,618	3.00 %
Property tax	$ 15,200	5.29 %
Snow Removal	$ 1,200	0.42 %
Total Expenses	$ 46,037	16.03 %
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.	$ 241,243	83.97 %

Cash Flow (Year 1)

Net Operating Income	$ 241,243	83.97 %
Annual Debt Service	$ 182,509	63.53 %
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.	$ 58,735	20.45 %
Income Tax Liability	$ 19,110	6.65 %
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.	$ 39,625	13.79 %

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).	16.03 %
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.	79.55 %

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.	$ 1,990,001
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.	22.33 %
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	6.01
Annual Depreciation	$ 19,487

Holding period of 15 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.	14.78 %
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.	21.95 %
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.	6.35 %
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.	31.83 %
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.	12.57

Financing		% of ARV
Down Payment	$ 397,500	10.46 %
Loan	$ 2,252,500	59.28 %
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.		237.11 %
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).		85.00 %
Debt Coverage Ratio		1.32

Loan Financing of: Purchase + Repairs ($ 2,650,000)
Type	Amortized
Loan Amount	$ 2,252,500
Down payment (15%)	$ 397,500
Amortization	25 years
Interest Rate	6.50 %
Monthly Payment	$ 15,209.04

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
Operational Analysis
Gross Scheduled Income	0	302,400	308,448	314,617	320,909	327,327	333,874	340,552	347,363	354,310	361,396	368,624	375,996	383,516	391,187	399,010
Vacancy Loss	0	15,120	15,422	15,731	16,045	16,366	16,694	17,028	17,368	17,715	18,070	18,431	18,800	19,176	19,559	19,951
Gross Operating Income	0	287,280	293,026	298,886	304,864	310,961	317,180	323,524	329,994	336,594	343,326	350,193	357,197	364,341	371,627	379,060
Expenses	0	46,037	46,958	47,897	48,855	49,832	50,828	51,845	52,882	53,939	55,018	56,119	57,241	58,386	59,554	60,745
Net Operating Income	0	241,243	246,068	250,989	256,009	261,129	266,352	271,679	277,113	282,655	288,308	294,074	299,956	305,955	312,074	318,315
Loan Payment	0	182,508	182,508	182,508	182,508	182,508	182,508	182,508	182,508	182,508	182,508	182,508	182,508	182,508	182,508	182,508
Payment Interest Part	0	145,317	142,827	140,169	137,334	134,308	131,080	127,636	123,961	120,040	115,856	111,392	106,630	101,548	96,126	90,341
Payment Principal Part	0	37,191	39,682	42,339	45,175	48,200	51,428	54,873	58,548	62,469	66,652	71,116	75,879	80,961	86,383	92,168
Cash Flow
Repairs/Construction	1,700,000	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-397,500	58,735	63,560	68,481	73,501	78,621	83,843	89,171	94,604	100,146	105,799	111,566	117,447	123,446	129,565	135,807
Depreciation	0	19,487	19,487	19,487	19,487	19,487	19,487	19,487	19,487	19,487	19,487	19,487	19,487	19,487	19,487	19,487
Taxes	0	19,110	20,939	22,833	24,797	26,834	28,946	31,139	33,416	35,782	38,241	40,799	43,460	46,230	49,115	52,122
Cash Flow After Taxes	-397,500	39,625	42,621	45,648	48,704	51,787	54,897	58,031	61,188	64,364	67,558	70,767	73,987	77,216	80,450	83,685

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 15 years. Below is the resale price calculated using different methods.

Capitalization (6.00%) & NOI	$ 5,305,255
Appreciation (3.00%)	$ 5,920,276
Gross Rent Multiplier	$ 5,015,561

Sale Proceeds

Projected Selling Price	$ 5,305,255
Costs of Sale (5.00%)	$ 265,263
1. Loan Balance Payoff	$ 1,339,437
Net Sale Proceeds Before Tax	$ 3,700,555

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	$ 3,700,555
Investor Cash Outlay	$ 397,500
Net Assets	$ 3,303,055
Average Yield
Annual Net Assets	$ 220,204
Average Cash Flow (After Taxes)	$ 55,790
Average Annual Gain (After Taxes)	$ 275,993
Average Annual Yield (After Taxes)	29.05 %

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: Main St Phoenixville Mixed Use RENTAL PUBLISHED

Property Report :

Main St Phoenixville Mixed Use

119 Main St, Phoenixville, PA 19460

Executive Summary

119 Main St, Phoenixville, PA 19460

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