153 W Way Dr, Allen TX 75002

153 W Way Dr, Allen, TX 75002

Singlefamily: 3 bedrooms , 2 bathrooms

Year built: 1978, Size: 1375 SF

Investment strategy: Rental Property

Purchase Price$ 280,000

Rent$ 1,725/mo

Monthly Cash Flow$ -175

Cash on Cash Return-3.74 %

Financial Analysis

Cash on Cash Return	-3.74 %
Internal Rate of Return (IRR)	6.33 %
Capitalization Rate	3.83 %
Gross Rent Multiplier (GRM)	13.53
Debt-coverage Ratio (DCR)	0.84
Operating Expense Ratio (OER)	42.37 %

Financial Breakdown

Purchase Price	$ 280,000
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).	$ 280,000
Financing	$ 224,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 56,000
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.	$ 56,000
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	$ 1,725/mo
Gross Operating Income (GOI)	$ 18,630
Total Expenses	$ 7,893
Net Operating Income (NOI)	$ 10,737
Annual Debt Service	$ 12,833
Cash Flow Before Taxes (CFBT)	$ -2,096
Income Tax Liability	$ -3,148
Cash Flow After Taxes (CFAT)	$ 1,052

Absolutely Gorgeous home in highly sought after Allen with exemplary schools Priced Under Market! This 3 bed, 2 full bath home is practically brand new! The fantastic open floor plan boasts rich hardwood floors, beautifully updated kitchen with Granite counters, large stone fireplace adorns the living, fresh paint throughout, all bathrooms completely remodeled and new windows installed. The large back yard is your private Oasis! Outside of home has been freshly painted. We will provide the long list of all updates to the home upon request. Home is located just minutes from fine dining, shops, Fairview Town Center & Watters Creek!

Purchase Price	$ 280,000
Address	153 W Way Dr , Allen, 75002, TX
MLS^® #	14618172
Listing Agent	Alan Gieb
Listing Broker	Ai Group Realty
Year Built	1978
Type	Singlefamily
Size	1375 SF
Bedrooms	3
Bathrooms	2

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.	$ 20,700
Total Gross Income	$ 20,700
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.	$ 2,070
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.	$ 18,630	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	5.09 %
Property tax	$ 4,317	23.17 %
Insurance	$ 2,628	14.11 %
Total Expenses	$ 7,893	42.37 %
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.	$ 10,737	57.63 %

Cash Flow (Year 1)

Net Operating Income	$ 10,737	57.63 %
Annual Debt Service	$ 12,833	68.88 %
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.	$ -2,096	-11.25 %
Income Tax Liability	$ -3,148	-16.90 %
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.	$ 1,052	5.65 %

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).	42.37 %
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.	111.25 %

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.	$ 24,176
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.	6.33 %
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	1.43
Annual Depreciation	$ 8,145

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.	-3.74 %
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.	1.26 %
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.	3.83 %
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.	7.39 %
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.	13.53

Financing
Down Payment		$ 56,000
30y		$ 224,000
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		0.84

30y Financing of: Purchase price ($ 280,000)
Type	Amortized
Loan Amount	$ 224,000
Down payment (20%)	$ 56,000
Amortization	30 years
Interest Rate	4.00 %
Monthly Payment	$ 1,069.41

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	20,700	20,907	21,116	21,327	21,541	21,756	21,973	22,193	22,415	22,639	22,866	23,094	23,325	23,559	23,794	24,032	24,272	24,515	24,760	25,008	25,258	25,510	25,766	26,023	26,283	26,546	26,812	27,080	27,351	27,624
Vacancy Loss	0	2,070	2,091	2,112	2,133	2,154	2,176	2,197	2,219	2,242	2,264	2,287	2,309	2,333	2,356	2,379	2,403	2,427	2,452	2,476	2,501	2,526	2,551	2,577	2,602	2,628	2,655	2,681	2,708	2,735	2,762
Gross Operating Income	0	18,630	18,816	19,004	19,195	19,386	19,580	19,776	19,974	20,174	20,375	20,579	20,785	20,993	21,203	21,415	21,629	21,845	22,064	22,284	22,507	22,732	22,959	23,189	23,421	23,655	23,892	24,131	24,372	24,616	24,862
Expenses	0	7,893	8,051	8,212	8,376	8,544	8,715	8,889	9,067	9,248	9,433	9,622	9,814	10,010	10,210	10,415	10,623	10,835	11,052	11,273	11,499	11,729	11,963	12,202	12,446	12,695	12,949	13,208	13,472	13,742	14,017
Net Operating Income	0	10,737	10,765	10,793	10,818	10,843	10,866	10,887	10,907	10,926	10,942	10,958	10,971	10,982	10,992	11,000	11,006	11,010	11,011	11,011	11,008	11,004	10,996	10,987	10,974	10,960	10,942	10,922	10,899	10,874	10,845
Loan Payment	0	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833	12,833
Payment Interest Part	0	8,888	8,727	8,560	8,386	8,205	8,016	7,820	7,616	7,403	7,182	6,952	6,712	6,463	6,204	5,933	5,652	5,360	5,055	4,738	4,409	4,065	3,708	3,337	2,950	2,547	2,128	1,692	1,238	765	274
Payment Principal Part	0	3,945	4,105	4,273	4,447	4,628	4,816	5,013	5,217	5,429	5,651	5,881	6,121	6,370	6,629	6,899	7,181	7,473	7,778	8,094	8,424	8,767	9,125	9,496	9,883	10,286	10,705	11,141	11,595	12,067	12,559
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	-56,000	-2,096	-2,067	-2,040	-2,015	-1,990	-1,967	-1,946	-1,926	-1,907	-1,890	-1,875	-1,862	-1,850	-1,841	-1,833	-1,827	-1,823	-1,821	-1,822	-1,825	-1,829	-1,837	-1,846	-1,858	-1,873	-1,891	-1,911	-1,934	-1,959	-1,988
Depreciation	0	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145	8,145
Taxes	0	-3,148	-3,054	-2,956	-2,856	-2,754	-2,648	-2,539	-2,427	-2,311	-2,192	-2,070	-1,943	-1,813	-1,678	-1,539	-1,396	-1,248	-1,094	-936	-773	-603	-428	-247	-60	134	335	543	758	982	1,213
Cash Flow After Taxes	-56,000	1,052	986	916	842	763	681	593	501	404	302	194	81	-38	-163	-294	-431	-576	-727	-886	-1,052	-1,226	-1,408	-1,599	-1,798	-2,007	-2,225	-2,453	-2,692	-2,941	-3,201

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%)	$ 377,398
Cap Rate (3.83%) & NOI	$ 283,160
Gross Rent Multiplier	$ 373,755

Sale Proceeds

Projected Selling Price	$ 377,398
Costs of Sale (6.00%)	$ 22,644
Net Sale Proceeds Before Tax	$ 354,754

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	$ 354,754
Investor Cash Outlay	$ 56,000
Net Assets	$ 298,754
Average Yield
Annual Net Assets	$ 9,958
Average Cash Flow (After Taxes)	$ -507
Average Annual Gain (After Taxes)	$ 9,452
Average Annual Yield (After Taxes)	3.38 %

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: 153 W Way Dr, Allen RENTAL

Property Report :

153 W Way Dr, Allen, TX 75002

Executive Summary