3BR/2BA Townhouse in Cudell: 2084 W 98th St, Cleveland OH 44102

2084 W 98th St, Cleveland, OH 44102

6 rooms: 3 bedrooms , 2 bathrooms

Year built: 1910, Size: 1260 SF

Investment strategy: Rental Property

Purchase Price$ 56,500

Rent$ 950/mo

Monthly Cash Flow$ 603

Cash on Cash Return10.33 %

Financial Analysis

Cash on Cash Return	10.33 %
Internal Rate of Return (IRR)	12.04 %
Capitalization Rate	8.04 %
Gross Rent Multiplier (GRM)	7.89
Debt-coverage Ratio (DCR)	0.00
Operating Expense Ratio (OER)	33.22 %
After Repair Value	$ 90,000
Profit/Equity From Rehab	$ 20,000

Financial Breakdown

Purchase Price	$ 56,500
Purchase Costs	$ 565
Repair/Construction Costs	$ 12,935
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 70,000
Financing	$ 0
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 70,000
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.	$ 0
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.	$ 70,000

Operating Analysis

Rent	$ 950/mo
Gross Operating Income (GOI)	$ 10,830
Total Expenses	$ 3,598
Net Operating Income (NOI)	$ 7,233
Annual Debt Service	$ 0
Cash Flow Before Taxes (CFBT)	$ 7,233
Income Tax Liability	$ 1,397
Cash Flow After Taxes (CFAT)	$ 5,835

This property will be updated further (Kitchen/upstairs BR) and repainted on the interior to push rent and ARV. Comparison and ARV disclosure: There are 6 rehabbed properties in the Cudell neighborhood that have sold for $90,000 to $179,000 in the last year. According to Redfin statistics Median List Price is $165,000, Median $ / Sq. Ft.$63 and Median Sale / List is 95%. There is only one townhouse comparison as there are few of these properties in the area. We have therefore used both TH and SF in the analysis. Our realtor gave us a comp of $106,000 so we adjusted downward to $90,000 to be conservative in our estimates. This analysis been prepared by Scottsdale REI, LLC (Scottsdale Real Estate Investments). It should not be considered as an offer or invitation to subscribe in or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation or any information, opinions or conclusions expressed in the course of this presentation. This analysis is not a prospectus or other offering document under U.S. law or under any other law. It has been prepared for information purposes only. This analysis contains information that is based on expected costs to Scottsdale REI, LLC and estimates from third parties such as real estate brokers, title companies, contractors and sub-contractors, and materials costs at the time this analysis was prepared. The analysis also includes projections that may or may not represent actual market conditions in the future. This analysis does not take into account the investment objectives, financial situation and particular needs of any individual investor. It is not investment advice and prospective investors should obtain their own independent advice from qualified fiduciary financial advisors having regard to their specific financial objectives, situation and needs.

Purchase Price	$ 56,500
Address	2084 W 98th St , Cleveland, 44102, OH
Year Built	1910
Size	1260 SF
Bedrooms	3
Bathrooms	2
Rooms Total	6

2084 W 98th St Cleveland, OH 44102

$ 90,000

Property ARV
1,260

SqFt
$ 71

per SqFt
3

Beds
2

Baths

#	Property address	Distance	Beds	Baths	SqFt	Date sold	Sale price	$/SqFt	Notes
1	2208 W 103rd St	0.4mi	3	2.0	1,106	04/16/2019	$ 84,500	$ 76
2	2088 w 87th	1.0mi	4	2	1,371	08/10/2018	$ 118,700	$ 87	SF
Average:							$ 101,600	$ 82

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.	$ 11,400
Total Gross Income	$ 11,400
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.	$ 570
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.	$ 10,830	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	$ 1,083	10.00 %
Insurance	$ 700	6.46 %
Repairs	$ 542	5.00 %
Property tax	$ 1,273	11.75 %
Total Expenses	$ 3,598	33.22 %
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.	$ 7,233	66.78 %

Cash Flow (Year 1)

Net Operating Income	$ 7,233	66.78 %
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.	$ 7,233	66.78 %
Income Tax Liability	$ 1,397	12.90 %
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.	$ 5,835	53.88 %

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).	33.22 %
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.	33.22 %

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.	$ 45,954
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.	12.04 %
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	1.66
Annual Depreciation	$ 1,644

Holding period of 10 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.	10.33 %
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.	12.75 %
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.	8.04 %
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.	20.18 %
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.	7.89

There is no financing selected in this deal.

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
Operational Analysis
Gross Scheduled Income	0	11,400	11,628	11,861	12,098	12,340	12,587	12,838	13,095	13,357	13,624
Vacancy Loss	0	570	581	593	605	617	629	642	655	668	681
Gross Operating Income	0	10,830	11,047	11,268	11,493	11,723	11,957	12,196	12,440	12,689	12,943
Expenses	0	3,598	3,669	3,743	3,818	3,894	3,972	4,051	4,132	4,215	4,299
Net Operating Income	0	7,233	7,377	7,525	7,675	7,829	7,985	8,145	8,308	8,474	8,643
Cash Flow
Repairs/Construction	12,935	0	0	0	0	0	4,500	0	0	0	0
Cash Flow Before Taxes	-70,000	7,233	7,377	7,525	7,675	7,829	3,485	8,145	8,308	8,474	8,643
Depreciation	0	1,644	1,644	1,644	1,644	1,644	1,644	1,644	1,644	1,644	1,644
Taxes	0	1,397	1,433	1,470	1,508	1,546	460	1,625	1,666	1,708	1,750
Cash Flow After Taxes	-70,000	5,835	5,944	6,055	6,167	6,283	3,025	6,520	6,642	6,767	6,894

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 10 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 120,952
Cap Rate (8.04%) & NOI	$ 107,506
Gross Rent Multiplier	$ 107,494

Sale Proceeds

Projected Selling Price	$ 120,952
Costs of Sale (6.00%)	$ 7,257
Net Sale Proceeds Before Tax	$ 113,695

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	$ 113,695
Investor Cash Outlay	$ 70,000
Net Assets	$ 43,695
Average Yield
Annual Net Assets	$ 4,370
Average Cash Flow (After Taxes)	$ 5,324
Average Annual Gain (After Taxes)	$ 9,693
Average Annual Yield (After Taxes)	17.16 %

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.

There is no financing selected in this deal.

Property Report: 3BR/2BA Townhouse in Cudell RENTAL

Property Report :

3BR/2BA Townhouse in Cudell

2084 W 98th St, Cleveland, OH 44102

Executive Summary

2084 W 98th St, Cleveland, OH 44102

Financial Analysis

Financial Breakdown

Total Capital Needed

Total Capital Needed

Cash out of Pocket

Cash out of Pocket

Cash at Closing

Cash at Closing

Cash During Rehab

Cash During Rehab

Operating Analysis

Property Description

Comparative Sales Analysis

$ 90,000

Property ARV

1,260

SqFt

$ 71

per SqFt

3

Beds

2

Baths

Operating Analysis

Annual Property Operating Data

Gross Scheduled Income (GSI)

Gross Scheduled Income (GSI)

Vacancy and Credit Loss

Vacancy and Credit Loss

Gross Operating Income (GOI)

Gross Operating Income (GOI)

Operating Expenses

Operating Expenses

Net Operating Income (NOI)

Net Operating Income (NOI)

Cash Flow (Year 1)

Cash Flow

Cash Flow

Cash Flow

Cash Flow

Operating Ratios

Operating Expense Ratio

Operating Expense Ratio

Break-Even Ratio (BER)

Break-Even Ratio (BER)

Financial Analysis

Financial Measures

Net Present Value (NPV)

Net Present Value (NPV)

Internal Rate of Return (IRR)

Internal Rate of Return (IRR)

Profitability Index

Profitability Index

Investment Return Ratios

Cash on Cash Return

Cash on Cash Return

Return on Investment

Return on Investment

Capitalization Rate

Capitalization Rate

Gross Rental Yield

Gross Rental Yield

Gross Rent Multiplier (GRM)

Gross Rent Multiplier (GRM)

Financing Overview

Long-term Cash Flow Forecast

Resale Analysis

Resale Price Evaluation Methods

Sale Proceeds

Net Assets and Yield

Lender Report

Photos