12234 W Dearbourn Ave Unit 12236, Wauwatosa WI 53226

12234 W Dearbourn Ave Unit 12236, Wauwatosa, WI 53226

Condominium: 6 bedrooms , 4 bathrooms

Year built: 1964, Size: 2970 SF

Investment strategy: Rental Property

Purchase Price$ 409,900

Rent$ 3,000/mo

Monthly Cash Flow$ 432

Cash on Cash Return11.51 %

Financial Analysis

Cash on Cash Return	11.51 %
Internal Rate of Return (IRR)	20.63 %
Capitalization Rate	5.81 %
Gross Rent Multiplier (GRM)	11.39
Debt-coverage Ratio (DCR)	1.28
Operating Expense Ratio (OER)	31.83 %

Financial Breakdown

Purchase Price	$ 409,900
Purchase Costs	$ 4,100
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).	$ 414,000
Financing	$ 368,910
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 45,090
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.	$ 40,990
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.	$ 4,100

Operating Analysis

Rent	$ 3,000/mo
Gross Operating Income (GOI)	$ 34,920
Total Expenses	$ 11,116
Net Operating Income (NOI)	$ 23,804
Annual Debt Service	$ 18,616
Cash Flow Before Taxes (CFBT)	$ 5,188
Income Tax Liability	$ 248
Cash Flow After Taxes (CFAT)	$ 4,940

Beautiful side by Side town home for investment or owner occupy 1500 square foot units with 3 bedrooms and 1.5 baths Both units have hardwood floors in the upper level New kitchen cabinets flooring counter tops and full bath vanity in unit 2 Unit 1 has granite counter tops, and both baths are updated Both interiors freshly painted. New windows in 2020 Just steps away from a park and Hank Aaron State trail

Purchase Price	$ 409,900
Address	12234 W Dearbourn Ave Unit 12236 , Wauwatosa, 53226, WI
MLS^® #	1777312
Listing Agent	James Tripp
Listing Broker	EXIT REALTY XL
Year Built	1964
Type	Condominium
Size	2970 SF
Bedrooms	6
Bathrooms	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.	$ 36,000
Total Gross Income	$ 36,000
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.	$ 1,080
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.	$ 34,920	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	$ 4,500	12.89 %
Property tax	$ 5,800	16.61 %
Insurance	$ 816	2.34 %
Total Expenses	$ 11,116	31.83 %
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.	$ 23,804	68.17 %

Cash Flow (Year 1)

Net Operating Income	$ 23,804	68.17 %
Annual Debt Service	$ 18,616	53.31 %
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.	$ 5,188	14.86 %
Income Tax Liability	$ 248	0.71 %
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.	$ 4,940	14.15 %

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).	31.83 %
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.	85.14 %

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.	$ 162,955
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.	20.63 %
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	4.61
Annual Depreciation	$ 11,924

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.	11.51 %
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.	38.78 %
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.	5.81 %
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.	8.78 %
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.	11.39

Financing
Down Payment		$ 40,990
Conventional 30 yr fixed		$ 368,910
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.		90.00 %
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).		90.00 %
Debt Coverage Ratio		1.28

Conventional 30 yr fixed Financing of: Purchase price ($ 409,900)
Type	Amortized
Loan Amount	$ 368,910
Down payment (10%)	$ 40,990
Amortization	30 years
Interest Rate	2.98 %
Monthly Payment	$ 1,551.36

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	36,000	36,720	37,454	38,203	38,968	39,747	40,542	41,353	42,180	43,023	43,884	44,761	45,657	46,570	47,501
Vacancy Loss	0	1,080	1,102	1,124	1,146	1,169	1,192	1,216	1,241	1,265	1,291	1,317	1,343	1,370	1,397	1,425
Gross Operating Income	0	34,920	35,618	36,331	37,057	37,799	38,555	39,326	40,112	40,914	41,733	42,567	43,419	44,287	45,173	46,076
Expenses	0	11,116	11,338	11,565	11,796	12,032	12,273	12,518	12,769	13,024	13,285	13,550	13,821	14,098	14,380	14,667
Net Operating Income	0	23,804	24,280	24,766	25,261	25,766	26,282	26,807	27,343	27,890	28,448	29,017	29,597	30,189	30,793	31,409
Loan Payment	0	18,616	18,616	18,616	18,616	18,616	18,616	18,616	18,616	18,616	18,616	18,616	18,616	18,616	18,616	18,616
Payment Interest Part	0	10,889	10,655	10,415	10,167	9,912	9,649	9,378	9,099	8,811	8,515	8,210	7,895	7,571	7,238	6,894
Payment Principal Part	0	7,728	7,961	8,202	8,450	8,705	8,968	9,239	9,518	9,805	10,102	10,407	10,721	11,045	11,379	11,722
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-45,090	5,188	5,664	6,149	6,645	7,150	7,665	8,191	8,727	9,274	9,832	10,401	10,981	11,573	12,177	12,793
Depreciation	0	11,924	11,924	11,924	11,924	11,924	11,924	11,924	11,924	11,924	11,924	11,924	11,924	11,924	11,924	11,924
Taxes	0	248	425	607	793	983	1,177	1,376	1,580	1,789	2,002	2,221	2,445	2,673	2,908	3,148
Cash Flow After Taxes	-45,090	4,940	5,238	5,543	5,852	6,167	6,488	6,814	7,147	7,485	7,829	8,180	8,536	8,899	9,269	9,645

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.

Gross Rent Multiplier	$ 541,039
Appreciation (3.00%)	$ 638,611
Cap Rate (5.81%) & NOI	$ 540,600

Sale Proceeds

Projected Selling Price	$ 541,039
Costs of Sale (6.00%)	$ 32,462
1. Loan Balance Payoff	$ 224,959
Net Sale Proceeds Before Tax	$ 283,618

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	$ 283,618
Investor Cash Outlay	$ 45,090
Net Assets	$ 238,528
Average Yield
Annual Net Assets	$ 15,902
Average Cash Flow (After Taxes)	$ 6,559
Average Annual Gain (After Taxes)	$ 22,461
Average Annual Yield (After Taxes)	5.48 %

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: 12234 W Dearbourn Ave Unit 12236, Wauwatosa RENTAL

Property Report :

12234 W Dearbourn Ave Unit 12236, Wauwatosa, WI 53226

Executive Summary