174 Harris St, Grantsville UT 84029

174 Harris St, Grantsville, UT 84029

Singlefamily: 4 bedrooms , 1.5 bathrooms

Year built: 1965, Size: 2184 SF

Investment strategy: Rental Property

PRICE REDUCTION! This home has many wonderful new additions! They've completed a garage, updated the flooring, and opened the floor plan to make a Great room. The beautifully remodeled kitchen has NEW appliances, counter tops, cabinets and breakfast nook. They updated the bathroom vanity to match the kitchen so the home is aesthetically pleasing. New electric panel and fiber internet is also a great bonus! This home is walking distance to churches, parks, schools and grocery stores. If you need to commute into town, the bus route goes right into Salt Lake City. Enjoy living in a charming home & lovely neighborhood!

Purchase Price$ 389,000

Rent$ 1,951/mo

Monthly Cash Flow$ 324

Cash on Cash Return1.96 %

Financial Analysis

Cash on Cash Return	1.96 %
Internal Rate of Return (IRR)	7.30 %
Capitalization Rate	4.60 %
Gross Rent Multiplier (GRM)	16.62
Debt-coverage Ratio (DCR)	1.28
Operating Expense Ratio (OER)	22.83 %

Financial Breakdown

Purchase Price	$ 389,000
Purchase Costs	$ 3,800
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).	$ 392,800
Financing	$ 194,500
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 198,300
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.	$ 194,500
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.	$ 3,800

Operating Analysis

Rent	$ 1,951/mo
Gross Operating Income (GOI)	$ 23,178
Total Expenses	$ 5,292
Net Operating Income (NOI)	$ 17,886
Annual Debt Service	$ 13,994
Cash Flow Before Taxes (CFBT)	$ 3,892
Income Tax Liability	$ -1,259
Cash Flow After Taxes (CFAT)	$ 5,151

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.	$ 23,412
Total Gross Income	$ 23,412
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.	$ 234
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.	$ 23,178	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	$ 2,063	8.90 %
Repairs	$ 695	3.00 %
Property tax	$ 1,754	7.57 %
Insurance	$ 780	3.37 %
Total Expenses	$ 5,292	22.83 %
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.	$ 17,886	77.17 %

Cash Flow (Year 1)

Net Operating Income	$ 17,886	77.17 %
Annual Debt Service	$ 13,994	60.37 %
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.	$ 3,892	16.79 %
Income Tax Liability	$ -1,259	-5.43 %
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.	$ 5,151	22.22 %

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).	22.83 %
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.	83.21 %

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.	$ 128,834
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.	7.30 %
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	1.65
Annual Depreciation	$ 11,316

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.	1.96 %
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.	7.85 %
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.	4.60 %
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.	6.02 %
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.	16.62

Financing
Down Payment		$ 194,500
Conventional		$ 194,500
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.		50.00 %
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).		50.00 %
Debt Coverage Ratio		1.28

Conventional Financing of: Purchase price ($ 389,000)
Type	Amortized
Loan Amount	$ 194,500
Down payment (50%)	$ 194,500
Amortization	30 years
Interest Rate	6.00 %
Monthly Payment	$ 1,166.13

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	23,412	23,880	24,358	24,845	25,342	25,849	26,366	26,893	27,431	27,980	28,539	29,110	29,692	30,286	30,892	31,509	32,140	32,782	33,438	34,107	34,789	35,485	36,194	36,918	37,657	38,410	39,178	39,962	40,761	41,576
Vacancy Loss	0	234	239	244	248	253	258	264	269	274	280	285	291	297	303	309	315	321	328	334	341	348	355	362	369	377	384	392	400	408	416
Gross Operating Income	0	23,178	23,641	24,114	24,597	25,088	25,590	26,102	26,624	27,157	27,700	28,254	28,819	29,395	29,983	30,583	31,194	31,818	32,455	33,104	33,766	34,441	35,130	35,833	36,549	37,280	38,026	38,786	39,562	40,353	41,160
Expenses	0	5,292	5,398	5,506	5,616	5,728	5,843	5,960	6,079	6,201	6,325	6,451	6,580	6,712	6,846	6,983	7,123	7,265	7,410	7,559	7,710	7,864	8,021	8,182	8,345	8,512	8,682	8,856	9,033	9,214	9,398
Net Operating Income	0	17,886	18,243	18,608	18,980	19,360	19,747	20,142	20,545	20,956	21,375	21,803	22,239	22,683	23,137	23,600	24,072	24,553	25,044	25,545	26,056	26,577	27,109	27,651	28,204	28,768	29,343	29,930	30,529	31,139	31,762
Loan Payment	0	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994	13,994
Payment Interest Part	0	11,605	11,458	11,301	11,135	10,959	10,772	10,573	10,362	10,138	9,900	9,648	9,380	9,095	8,793	8,472	8,132	7,770	7,387	6,979	6,546	6,087	5,599	5,082	4,532	3,949	3,329	2,671	1,973	1,232	444
Payment Principal Part	0	2,388	2,536	2,692	2,858	3,035	3,222	3,420	3,631	3,855	4,093	4,346	4,614	4,898	5,200	5,521	5,862	6,223	6,607	7,014	7,447	7,906	8,394	8,912	9,461	10,045	10,665	11,322	12,021	12,762	13,549
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	-198,300	3,892	4,250	4,615	4,987	5,367	5,754	6,149	6,552	6,962	7,382	7,809	8,245	8,690	9,144	9,606	10,078	10,560	11,051	11,552	12,063	12,584	13,115	13,657	14,210	14,775	15,350	15,937	16,535	17,146	17,769
Depreciation	0	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316	11,316
Taxes	0	-1,259	-1,133	-1,002	-868	-729	-585	-437	-283	-125	40	210	386	568	757	953	1,156	1,367	1,585	1,813	2,048	2,294	2,548	2,813	3,089	3,376	3,675	3,986	4,310	4,648	5,000
Cash Flow After Taxes	-198,300	5,151	5,382	5,617	5,855	6,095	6,339	6,585	6,835	7,087	7,342	7,599	7,859	8,122	8,387	8,653	8,922	9,193	9,465	9,739	10,014	10,290	10,567	10,844	11,121	11,399	11,675	11,951	12,225	12,498	12,768

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 (3.00%)	$ 944,205
Cap Rate (4.60%) & NOI	$ 690,483
Gross Rent Multiplier	$ 690,994

Sale Proceeds

Projected Selling Price	$ 944,205
Costs of Sale (6.00%)	$ 56,652
Net Sale Proceeds Before Tax	$ 887,553

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	$ 887,553
Investor Cash Outlay	$ 198,300
Net Assets	$ 689,253
Average Yield
Annual Net Assets	$ 22,975
Average Cash Flow (After Taxes)	$ 8,427
Average Annual Gain (After Taxes)	$ 31,402
Average Annual Yield (After Taxes)	8.07 %

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: 174 Harris St, Grantsville RENTAL

Property Report :

174 Harris St, Grantsville, UT 84029

Executive Summary