1311 S 91st St, West Allis WI 53214

1311 S 91st St, West Allis, WI 53214

Singlefamily: 2 bedrooms , 1 bathroom

Year built: 1936,

Investment strategy: Rental Property

1 Unit Rental Property

Purchase Price$ 70,000

Rent$ 900/mo

Monthly Cash Flow$ -47

Cash on Cash Return-2.77 %

Financial Analysis

Cash on Cash Return	-2.77 %
Internal Rate of Return (IRR)	8.29 %
Capitalization Rate	5.04 %
Gross Rent Multiplier (GRM)	6.48
Debt-coverage Ratio (DCR)	0.86
Operating Expense Ratio (OER)	66.31 %

Financial Breakdown

Purchase Price	$ 70,000
Purchase Costs	$ 3,000
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).	$ 73,000
Financing	$ 52,500
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 20,500
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.	$ 17,500
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.	$ 3,000

Operating Analysis

Rent	$ 900/mo
Gross Operating Income (GOI)	$ 10,476
Total Expenses	$ 6,946
Net Operating Income (NOI)	$ 3,530
Annual Debt Service	$ 4,098
Cash Flow Before Taxes (CFBT)	$ -568
Income Tax Liability	$ -421
Cash Flow After Taxes (CFAT)	$ -147

Improvements: New Roof 3 years, Brand new windows and new deck.

Purchase Price	$ 70,000
Address	1311 S 91st St , West Allis, 53214, WI
Year Built	1936
Type	Singlefamily
Bedrooms	2
Bathrooms	1

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.	$ 10,800
Total Gross Income	$ 10,800
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.	$ 324
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.	$ 10,476	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	$ 838	8.00 %
Water	$ 800	7.64 %
Insurance	$ 831	7.93 %
Repairs	$ 838	8.00 %
Lawn and Snow	$ 1,100	10.50 %
Property tax	$ 2,539	24.24 %
Total Expenses	$ 6,946	66.31 %
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.	$ 3,530	33.69 %

Cash Flow (Year 1)

Net Operating Income	$ 3,530	33.69 %
Annual Debt Service	$ 4,098	39.12 %
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.	$ -568	-5.42 %
Income Tax Liability	$ -421	-4.02 %
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.	$ -147	-1.40 %

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).	66.31 %
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.	105.42 %

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.	$ 23,179
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.	8.29 %
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	2.13
Annual Depreciation	$ 2,036

Holding period of 25 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.	-2.77 %
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.	7.47 %
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.	5.04 %
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.	15.43 %
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.	6.48

Financing
Down Payment		$ 17,500
Commercial Loan		$ 52,500
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.		75.00 %
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).		75.00 %
Debt Coverage Ratio		0.86

Commercial Loan Financing of: Purchase price ($ 70,000)
Type	Amortized
Loan Amount	$ 52,500
Down payment (25%)	$ 17,500
Amortization	25 years
Interest Rate	6.10 %
Monthly Payment	$ 341.47

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
Operational Analysis
Gross Scheduled Income	0	10,800	11,016	11,236	11,461	11,690	11,924	12,163	12,406	12,654	12,907	13,165	13,428	13,697	13,971	14,250	14,535	14,826	15,123	15,425	15,734	16,048	16,369	16,697	17,031	17,371
Vacancy Loss	0	324	330	337	344	351	358	365	372	380	387	395	403	411	419	428	436	445	454	463	472	481	491	501	511	521
Gross Operating Income	0	10,476	10,686	10,899	11,117	11,340	11,566	11,798	12,034	12,274	12,520	12,770	13,026	13,286	13,552	13,823	14,099	14,381	14,669	14,962	15,262	15,567	15,878	16,196	16,520	16,850
Expenses	0	6,946	7,085	7,227	7,371	7,519	7,669	7,823	7,979	8,139	8,301	8,467	8,637	8,809	8,986	9,165	9,349	9,536	9,726	9,921	10,119	10,322	10,528	10,739	10,953	11,172
Net Operating Income	0	3,530	3,600	3,672	3,746	3,821	3,897	3,975	4,055	4,136	4,219	4,303	4,389	4,477	4,566	4,658	4,751	4,846	4,943	5,041	5,142	5,245	5,350	5,457	5,566	5,678
Loan Payment	0	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098	4,098
Payment Interest Part	0	3,177	3,119	3,058	2,993	2,923	2,850	2,771	2,688	2,600	2,506	2,406	2,300	2,187	2,067	1,940	1,804	1,660	1,508	1,345	1,172	989	794	587	366	132
Payment Principal Part	0	921	978	1,040	1,105	1,174	1,248	1,326	1,410	1,498	1,592	1,692	1,798	1,911	2,031	2,158	2,293	2,437	2,590	2,753	2,925	3,109	3,304	3,511	3,731	3,965
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
Cash Flow Before Taxes	-20,500	-568	-497	-425	-352	-277	-200	-123	-43	38	121	205	291	379	469	560	653	748	845	944	1,045	1,147	1,252	1,359	1,469	1,580
Depreciation	0	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036	2,036
Taxes	0	-421	-389	-355	-321	-285	-247	-208	-167	-125	-81	-35	13	63	116	170	228	287	350	415	483	555	630	709	791	877
Cash Flow After Taxes	-20,500	-147	-109	-70	-31	8	47	86	124	163	202	240	278	316	353	389	425	461	495	529	561	592	622	651	678	703

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 25 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 146,564
Cap Rate (5.04%) & NOI	$ 112,649
Gross Rent Multiplier	$ 112,565

Sale Proceeds

Projected Selling Price	$ 146,564
Costs of Sale (6.00%)	$ 8,794
Net Sale Proceeds Before Tax	$ 137,770

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	$ 137,770
Investor Cash Outlay	$ 20,500
Net Assets	$ 117,270
Average Yield
Annual Net Assets	$ 4,691
Average Cash Flow (After Taxes)	$ 274
Average Annual Gain (After Taxes)	$ 4,965
Average Annual Yield (After Taxes)	7.09 %

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 S 91st St, West Allis RENTAL

Property Report :

1311 S 91st St, West Allis, WI 53214

Executive Summary