13556 Cedar Rd, University Heights OH 44118

13556 Cedar Rd, University Heights, OH 44118

Multifamily: 4 bedrooms , 2 bathrooms

Year built: 1951, Size: 3268 SF

Investment strategy: Rental Property

Purchase Price$ 145,000

Rent$ 1,575/mo

Monthly Cash Flow$ 308

Cash on Cash Return12.73 %

Financial Analysis

Cash on Cash Return	12.73 %
Internal Rate of Return (IRR)	11.51 %
Capitalization Rate	7.13 %
Gross Rent Multiplier (GRM)	7.67
Debt-coverage Ratio (DCR)	1.56
Operating Expense Ratio (OER)	39.24 %

Financial Breakdown

Purchase Price	$ 145,000
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).	$ 145,000
Financing	$ 116,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 29,000
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.	$ 29,000
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	$ 1,575/mo
Gross Operating Income (GOI)	$ 17,010
Total Expenses	$ 6,674
Net Operating Income (NOI)	$ 10,336
Annual Debt Service	$ 6,646
Cash Flow Before Taxes (CFBT)	$ 3,690
Income Tax Liability	$ 758
Cash Flow After Taxes (CFAT)	$ 2,933

This is a very well maintained duplex in the beautiful city of University Hts. A true turnkey property that is fully occupied so you can collect rent from the start. There are a total of 4 beds and 2 baths with a 2 car detached garage. Please do not approach tenants. The house will point of sale compliant upon transfer THIS WON'T LAST LONG!

Purchase Price	$ 145,000
Address	13556 Cedar Rd , University Heights, 44118, OH
MLS^® #	4280360
Listing Agent	Uday Patel
Listing Broker	Keller Williams Greater Cleveland
Year Built	1951
Type	Multifamily
Number of Units
Size	3268 SF
Bedrooms	4
Bathrooms	2

Property History

Date	Price	Change	Event
9/17/2012
10/17/2009
3/26/2004
5/1/1974

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.	$ 18,900
Total Gross Income	$ 18,900
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.	$ 1,890
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.	$ 17,010	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	5.57 %
Property tax	$ 5,294	31.12 %
Insurance	$ 432	2.54 %
Total Expenses	$ 6,674	39.24 %
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.	$ 10,336	60.76 %

Cash Flow (Year 1)

Net Operating Income	$ 10,336	60.76 %
Annual Debt Service	$ 6,646	39.07 %
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.	$ 3,690	21.70 %
Income Tax Liability	$ 758	4.45 %
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.	$ 2,933	17.24 %

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).	39.24 %
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.	78.30 %

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.	$ 50,807
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.	11.51 %
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	2.75
Annual Depreciation	$ 4,218

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.	12.73 %
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.	17.73 %
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.	7.13 %
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.	13.03 %
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.	7.67

Financing
Down Payment		$ 29,000
30y		$ 116,000
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		1.56

30y Financing of: Purchase price ($ 145,000)
Type	Amortized
Loan Amount	$ 116,000
Down payment (20%)	$ 29,000
Amortization	30 years
Interest Rate	4.00 %
Monthly Payment	$ 553.80

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	18,900	19,089	19,280	19,473	19,667	19,864	20,063	20,263	20,466	20,671	20,877	21,086	21,297	21,510	21,725	21,942	22,162	22,383	22,607	22,833	23,062	23,292	23,525	23,760	23,998	24,238	24,480	24,725	24,972	25,222
Vacancy Loss	0	1,890	1,909	1,928	1,947	1,967	1,986	2,006	2,026	2,047	2,067	2,088	2,109	2,130	2,151	2,173	2,194	2,216	2,238	2,261	2,283	2,306	2,329	2,353	2,376	2,400	2,424	2,448	2,473	2,497	2,522
Gross Operating Income	0	17,010	17,180	17,352	17,525	17,701	17,878	18,056	18,237	18,419	18,604	18,790	18,978	19,167	19,359	19,553	19,748	19,946	20,145	20,346	20,550	20,755	20,963	21,173	21,384	21,598	21,814	22,032	22,253	22,475	22,700
Expenses	0	6,674	6,807	6,944	7,083	7,224	7,369	7,516	7,666	7,820	7,976	8,136	8,298	8,464	8,634	8,806	8,982	9,162	9,345	9,532	9,723	9,917	10,116	10,318	10,524	10,735	10,949	11,168	11,392	11,620	11,852
Net Operating Income	0	10,336	10,373	10,408	10,443	10,477	10,509	10,540	10,571	10,600	10,628	10,654	10,679	10,703	10,725	10,746	10,766	10,784	10,800	10,814	10,827	10,838	10,847	10,855	10,860	10,863	10,865	10,864	10,861	10,856	10,848
Loan Payment	0	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646	6,646
Payment Interest Part	0	4,603	4,520	4,433	4,343	4,249	4,151	4,050	3,944	3,834	3,719	3,600	3,476	3,347	3,213	3,073	2,927	2,776	2,618	2,454	2,283	2,105	1,920	1,728	1,527	1,319	1,102	876	641	396	142
Payment Principal Part	0	2,043	2,126	2,213	2,303	2,397	2,494	2,596	2,702	2,812	2,926	3,045	3,170	3,299	3,433	3,573	3,719	3,870	4,028	4,192	4,363	4,540	4,725	4,918	5,118	5,327	5,544	5,770	6,005	6,249	6,504
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	-29,000	3,690	3,727	3,763	3,797	3,831	3,863	3,895	3,925	3,954	3,982	4,008	4,034	4,057	4,080	4,101	4,120	4,138	4,154	4,169	4,182	4,193	4,202	4,209	4,215	4,218	4,219	4,218	4,215	4,210	4,202
Depreciation	0	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218	4,218
Taxes	0	758	818	879	941	1,005	1,070	1,136	1,204	1,274	1,345	1,418	1,493	1,569	1,647	1,728	1,810	1,895	1,982	2,071	2,163	2,257	2,355	2,454	2,557	2,663	2,772	2,885	3,001	3,121	3,244
Cash Flow After Taxes	-29,000	2,933	2,909	2,884	2,856	2,826	2,794	2,758	2,721	2,680	2,637	2,590	2,541	2,488	2,432	2,373	2,310	2,243	2,172	2,097	2,019	1,935	1,847	1,755	1,657	1,555	1,447	1,333	1,214	1,089	958

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%)	$ 195,438
Cap Rate (7.13%) & NOI	$ 152,145
Gross Rent Multiplier	$ 193,454

Sale Proceeds

Projected Selling Price	$ 195,438
Costs of Sale (6.00%)	$ 11,726
Net Sale Proceeds Before Tax	$ 183,712

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	$ 183,712
Investor Cash Outlay	$ 29,000
Net Assets	$ 154,712
Average Yield
Annual Net Assets	$ 5,157
Average Cash Flow (After Taxes)	$ 2,170
Average Annual Gain (After Taxes)	$ 7,327
Average Annual Yield (After Taxes)	5.05 %

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: 13556 Cedar Rd, University Heights RENTAL

Property Report :

13556 Cedar Rd, University Heights, OH 44118

Executive Summary