1302 S State St, Lockport IL 60441

1302 S State St, Lockport, IL 60441

Multifamily: 5 bedrooms , 3 bathrooms

Year built: 1882,

Investment strategy: Rental Property

Purchase Price$ 255,000

Rent$ 3,600/mo

Monthly Cash Flow$ 2,072

Cash on Cash Return8.81 %

Financial Analysis

Cash on Cash Return	8.81 %
Internal Rate of Return (IRR)	11.00 %
Capitalization Rate	7.31 %
Gross Rent Multiplier (GRM)	7.87
Debt-coverage Ratio (DCR)	0.00
Operating Expense Ratio (OER)	38.12 %
After Repair Value	$ 340,000
Profit/Equity From Rehab	$ 57,800

Financial Breakdown

Purchase Price	$ 255,000
Purchase Costs	$ 2,200
Repair/Construction Costs	$ 25,000
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 282,200
Financing	$ 0
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 282,200
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.	$ 0
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.	$ 282,200

Operating Analysis

Rent	$ 3,600/mo
Gross Operating Income (GOI)	$ 40,176
Total Expenses	$ 15,314
Net Operating Income (NOI)	$ 24,862
Annual Debt Service	$ 0
Cash Flow Before Taxes (CFBT)	$ 24,862
Income Tax Liability	$ 4,361
Cash Flow After Taxes (CFAT)	$ 20,501

Fabulous investment opportunity! This 3 unit plus detached garage is located in a prime location in downtown Lockport close to shopping, dining & train! Main level unit offers 3 bedrooms & basement, while the (2) 2nd level apartments each offer 1 bedroom & 1 bath. Plenty of driveway parking plus garage could be rented for additional income. All units are currently occupied. Newer windows & roof. Highly rated school district.

Purchase Price	$ 255,000
Address	1302 S State St , Lockport, 60441, IL
MLS^® #	11615181
Listing Agent	Kim Wirtz
Listing Broker	CENTURY 21 Affiliated
Year Built	1882
Type	Multifamily
Number of Units
Bedrooms	5
Bathrooms	3

Property History

Date	Price	Change	Event
3/16/2017
11/17/2005
11/21/2001
5/22/2001

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.	$ 43,200
Total Gross Income	$ 43,200
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.	$ 3,024
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.	$ 40,176	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	$ 3,500	8.71 %
Utilities	$ 3,600	8.96 %
Insurance	$ 1,600	3.98 %
Property tax	$ 6,614	16.46 %
Total Expenses	$ 15,314	38.12 %
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.	$ 24,862	61.88 %

Cash Flow (Year 1)

Net Operating Income	$ 24,862	61.88 %
Annual Debt Service	$ 0	0.00 %
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.	$ 24,862	61.88 %
Income Tax Liability	$ 4,361	10.85 %
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.	$ 20,501	51.03 %

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).	38.12 %
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.	38.12 %

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.	$ 155,300
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.	11.00 %
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	1.55
Annual Depreciation	$ 7,418

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.	8.81 %
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.	11.52 %
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.	7.31 %
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.	16.94 %
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.	7.87

There is no financing selected in this deal.

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	43,200	44,064	44,945	45,844	46,761	47,696	48,650	49,623	50,616	51,628
Vacancy Loss	0	3,024	3,084	3,146	3,209	3,273	3,339	3,406	3,474	3,543	3,614
Gross Operating Income	0	40,176	40,980	41,799	42,635	43,488	44,358	45,245	46,150	47,073	48,014
Expenses	0	15,314	15,620	15,933	16,251	16,576	16,908	17,246	17,591	17,943	18,302
Net Operating Income	0	24,862	25,359	25,866	26,384	26,911	27,450	27,999	28,559	29,130	29,712
Cash Flow
Repairs/Construction	25,000	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-282,200	24,862	25,359	25,866	26,384	26,911	27,450	27,999	28,559	29,130	29,712
Depreciation	0	7,418	7,418	7,418	7,418	7,418	7,418	7,418	7,418	7,418	7,418
Taxes	0	4,361	4,485	4,612	4,741	4,873	5,008	5,145	5,285	5,428	5,574
Cash Flow After Taxes	-282,200	20,501	20,874	21,254	21,642	22,038	22,442	22,853	23,273	23,702	24,139

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%)	$ 456,932
Cap Rate (7.31%) & NOI	$ 406,462
Gross Rent Multiplier	$ 406,312

Sale Proceeds

Projected Selling Price	$ 456,932
Costs of Sale (4.90%)	$ 22,390
Net Sale Proceeds Before Tax	$ 434,542

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	$ 434,542
Investor Cash Outlay	$ 282,200
Net Assets	$ 152,342
Average Yield
Annual Net Assets	$ 15,234
Average Cash Flow (After Taxes)	$ 19,858
Average Annual Gain (After Taxes)	$ 35,092
Average Annual Yield (After Taxes)	13.76 %

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: 1302 S State St, Lockport RENTAL

Property Report :

1302 S State St, Lockport, IL 60441

Executive Summary