1311 Clearview Ave, Parma OH 44134

1311 Clearview Ave, Parma, OH 44134

Singlefamily: 3 bedrooms , 2 bathrooms

Year built: 1951, Size: 1656 SF

Investment strategy: Rental Property

Purchase Price$ 124,900

Rent$ 1,175/mo

Monthly Cash Flow$ 728

Cash on Cash Return34.97 %

Financial Analysis

Cash on Cash Return	34.97 %
Internal Rate of Return (IRR)	25.15 %
Capitalization Rate	6.99 %
Gross Rent Multiplier (GRM)	8.86
Debt-coverage Ratio (DCR)	0.00
Operating Expense Ratio (OER)	31.17 %

Financial Breakdown

Purchase Price	$ 124,900
Purchase Costs	$ 0
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).	$ 124,900
Financing	$ 99,920
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 24,980
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.	$ 24,980
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	$ 1,175/mo
Gross Operating Income (GOI)	$ 12,690
Total Expenses	$ 3,955
Net Operating Income (NOI)	$ 8,735
Annual Debt Service	$ 0
Cash Flow Before Taxes (CFBT)	$ 8,735
Income Tax Liability	$ 2,551
Cash Flow After Taxes (CFAT)	$ 6,184

3 bedroom 2 bath Cape Cod in a quiet neighborhood with a one car detached garage. This house is perfect for a buyer looking to put their personal touches on it. Very close to I480/I77 for easy highway access and shopping is within walking distance. Come in quick and make this home yours!

Purchase Price	$ 124,900
Address	1311 Clearview Ave , Parma, 44134, OH
MLS^® #	4302837
Listing Agent	Michael Kaim Agent
Listing Broker	Berkshire Hathaway HomeServices Professional Realty
Year Built	1951
Type	Singlefamily
Size	1656 SF
Bedrooms	3
Bathrooms	2

Property History

Date	Price	Change	Event
1/22/2016

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.	$ 14,100
Total Gross Income	$ 14,100
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.	$ 1,410
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.	$ 12,690	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	$ 948	7.47 %
Property tax	$ 2,635	20.76 %
Insurance	$ 372	2.93 %
Total Expenses	$ 3,955	31.17 %
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.	$ 8,735	68.83 %

Cash Flow (Year 1)

Net Operating Income	$ 8,735	68.83 %
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.	$ 8,735	68.83 %
Income Tax Liability	$ 2,551	20.10 %
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.	$ 6,184	48.73 %

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).	31.17 %
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.	31.17 %

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.	$ 87,305
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.	25.15 %
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	4.49
Annual Depreciation	$ 3,633

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.	34.97 %
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.	39.97 %
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.	6.99 %
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.	11.29 %
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.	8.86

Financing
Down Payment		$ 24,980
30y		$ 99,920
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		0.00

30y Financing of: Purchase price ($ 124,900)
Type	Amortized
Loan Amount	$ 99,920
Down payment (20%)	$ 24,980
Amortization	30 years
Interest Rate	0.00 %
Monthly Payment	$ 0.00

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	14,100	14,241	14,383	14,527	14,673	14,819	14,967	15,117	15,268	15,421	15,575	15,731	15,888	16,047	16,208	16,370	16,533	16,699	16,866	17,034	17,205	17,377	17,550	17,726	17,903	18,082	18,263	18,446	18,630	18,816
Vacancy Loss	0	1,410	1,424	1,438	1,453	1,467	1,482	1,497	1,512	1,527	1,542	1,558	1,573	1,589	1,605	1,621	1,637	1,653	1,670	1,687	1,703	1,720	1,738	1,755	1,773	1,790	1,808	1,826	1,845	1,863	1,882
Gross Operating Income	0	12,690	12,817	12,945	13,075	13,205	13,337	13,471	13,605	13,741	13,879	14,018	14,158	14,299	14,442	14,587	14,733	14,880	15,029	15,179	15,331	15,484	15,639	15,795	15,953	16,113	16,274	16,437	16,601	16,767	16,935
Expenses	0	3,955	4,034	4,115	4,197	4,281	4,367	4,454	4,543	4,634	4,727	4,821	4,918	5,016	5,116	5,219	5,323	5,429	5,538	5,649	5,762	5,877	5,994	6,114	6,237	6,361	6,489	6,618	6,751	6,886	7,023
Net Operating Income	0	8,735	8,783	8,830	8,877	8,924	8,971	9,017	9,062	9,108	9,152	9,197	9,240	9,284	9,326	9,368	9,410	9,451	9,491	9,530	9,569	9,607	9,645	9,681	9,717	9,752	9,785	9,818	9,850	9,881	9,911
Loan Payment	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
Payment Interest Part	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
Payment Principal Part	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	99,920
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	-24,980	8,735	8,783	8,830	8,877	8,924	8,971	9,017	9,062	9,108	9,152	9,197	9,240	9,284	9,326	9,368	9,410	9,451	9,491	9,530	9,569	9,607	9,645	9,681	9,717	9,752	9,785	9,818	9,850	9,881	9,911
Depreciation	0	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633	3,633
Taxes	0	2,551	2,575	2,599	2,622	2,646	2,669	2,692	2,715	2,737	2,760	2,782	2,804	2,825	2,847	2,868	2,888	2,909	2,929	2,949	2,968	2,987	3,006	3,024	3,042	3,059	3,076	3,093	3,109	3,124	3,139
Cash Flow After Taxes	-24,980	6,184	6,208	6,232	6,255	6,279	6,302	6,325	6,348	6,370	6,393	6,415	6,437	6,458	6,480	6,501	6,521	6,542	6,562	6,582	6,601	6,620	6,639	6,657	6,675	6,692	6,709	6,726	6,742	6,757	6,772

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 (1.00%)	$ 168,346
Cap Rate (6.99%) & NOI	$ 141,794
Gross Rent Multiplier	$ 166,714

Sale Proceeds

Projected Selling Price	$ 168,346
Costs of Sale (6.00%)	$ 10,101
1. Loan Balance Payoff	$ 99,920
Net Sale Proceeds Before Tax	$ 58,325

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	$ 58,325
Investor Cash Outlay	$ 24,980
Net Assets	$ 33,345
Average Yield
Annual Net Assets	$ 1,112
Average Cash Flow (After Taxes)	$ 6,274
Average Annual Gain (After Taxes)	$ 7,385
Average Annual Yield (After Taxes)	5.91 %

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: 1311 Clearview Ave, Parma RENTAL

Property Report :

1311 Clearview Ave, Parma, OH 44134

Executive Summary