CWV Facility: 209 Upshur St NW, Washington DC 20011

209 Upshur St NW, Washington, DC 20011

Commercial (Special-Purpose):

Investment strategy: Rental Property

Purchase Price$ 4,750,000

Rent$ 31,250/mo

Monthly Cash Flow$ 5,575

Cash on Cash Return2.99 %

Financial Analysis

Cash on Cash Return	2.99 %
Internal Rate of Return (IRR)	8.39 %
Capitalization Rate	4.52 %
Gross Rent Multiplier (GRM)	16.00
Debt-coverage Ratio (DCR)	1.33
Operating Expense Ratio (OER)	27.73 %
After Repair Value	$ 6,000,000
Profit/Equity From Rehab	$ 202,000

Financial Breakdown

Purchase Price	$ 4,750,000
Purchase Costs	$ 48,000
Repair/Construction Costs	$ 1,000,000
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 5,798,000
Financing	$ 3,562,500
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 2,235,500
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.	$ 1,187,500
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.	$ 1,048,000

Operating Analysis

Rent	$ 31,250/mo
Gross Operating Income (GOI)	$ 375,000
Total Expenses	$ 104,000
Net Operating Income (NOI)	$ 271,000
Annual Debt Service	$ 204,095
Cash Flow Before Taxes (CFBT)	$ 66,905
Income Tax Liability	$ 8,051
Cash Flow After Taxes (CFAT)	$ 58,853

Purchase Price	$ 4,750,000
Address	209 Upshur St NW , Washington, 20011, DC
Type	Commercial
Category	Special-Purpose

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.	$ 375,000
Total Gross Income	$ 375,000
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.	$ 0
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.	$ 375,000	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).
Utilities	$ 19,000	5.07 %
Insurance	$ 12,000	3.20 %
Repairs	$ 6,000	1.60 %
Property tax	$ 67,000	17.87 %
Total Expenses	$ 104,000	27.73 %
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.	$ 271,000	72.27 %

Cash Flow (Year 1)

Net Operating Income	$ 271,000	72.27 %
Annual Debt Service	$ 204,095	54.43 %
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.	$ 66,905	17.84 %
Income Tax Liability	$ 8,051	2.15 %
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.	$ 58,853	15.69 %

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).	27.73 %
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.	82.16 %

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.	$ 2,493,647
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.	8.39 %
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	2.12
Annual Depreciation	$ 97,436

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.	2.99 %
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.	9.37 %
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.	4.52 %
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.	7.89 %
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.	16.00

Financing		% of ARV
Down Payment	$ 1,187,500	19.79 %
City First Bank	$ 3,562,500	59.38 %
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).		61.96 %
Debt Coverage Ratio		1.33

City First Bank Financing of: Purchase price ($ 4,750,000)
Type	Amortized
Loan Amount	$ 3,562,500
Down payment (25%)	$ 1,187,500
Amortization	30 years
Interest Rate	4.00 %
Monthly Payment	$ 17,007.92

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	375,000	382,500	390,150	397,953	405,912	414,030	422,311	430,757	439,372	448,160	457,123	466,265	475,591	485,102	494,805	504,701	514,795	525,091	535,592	546,304	557,230	568,375	579,742	591,337	603,164	615,227	627,532	640,082	652,884	665,942
Vacancy Loss	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
Gross Operating Income	0	375,000	382,500	390,150	397,953	405,912	414,030	422,311	430,757	439,372	448,160	457,123	466,265	475,591	485,102	494,805	504,701	514,795	525,091	535,592	546,304	557,230	568,375	579,742	591,337	603,164	615,227	627,532	640,082	652,884	665,942
Expenses	0	104,000	106,080	108,202	110,366	112,573	114,824	117,121	119,463	121,853	124,290	126,775	129,311	131,897	134,535	137,226	139,970	142,770	145,625	148,538	151,508	154,539	157,629	160,782	163,998	167,277	170,623	174,035	177,516	181,067	184,688
Net Operating Income	0	271,000	276,420	281,948	287,587	293,339	299,206	305,190	311,294	317,520	323,870	330,347	336,954	343,694	350,567	357,579	364,730	372,025	379,465	387,055	394,796	402,692	410,746	418,960	427,340	435,886	444,604	453,496	462,566	471,818	481,254
Loan Payment	0	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095	204,095
Payment Interest Part	0	141,358	138,802	136,142	133,373	130,492	127,493	124,373	121,125	117,744	114,226	110,565	106,754	102,788	98,661	94,365	89,895	85,242	80,400	75,360	70,116	64,657	58,976	53,064	46,911	40,507	33,842	26,905	19,686	12,173	4,354
Payment Principal Part	0	62,737	65,293	67,953	70,722	73,603	76,602	79,722	82,970	86,351	89,869	93,530	97,341	101,307	105,434	109,730	114,200	118,853	123,695	128,735	133,979	139,438	145,119	151,031	157,184	163,588	170,253	177,190	184,409	191,922	199,741
Cash Flow
Repairs/Construction	1,000,000	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	-2,235,500	66,905	72,325	77,853	83,492	89,244	95,111	101,095	107,199	113,425	119,775	126,252	132,859	139,598	146,472	153,484	160,635	167,930	175,370	182,960	190,701	198,597	206,651	214,865	223,245	231,791	240,509	249,401	258,471	267,723	277,159
Depreciation	0	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436	97,436
Taxes	0	8,051	10,045	12,093	14,194	16,353	18,569	20,845	23,183	25,585	28,052	30,587	33,191	35,867	38,618	41,444	44,350	47,337	50,407	53,565	56,811	60,150	63,583	67,115	70,748	74,486	78,332	82,289	86,361	90,552	94,866
Cash Flow After Taxes	-2,235,500	58,853	62,279	65,761	69,298	72,891	76,542	80,250	84,015	87,840	91,723	95,666	99,668	103,731	107,855	112,039	116,285	120,593	124,963	129,395	133,890	138,447	143,067	147,750	152,496	157,305	162,178	167,113	172,110	177,170	182,293

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%)	$ 14,563,575
Cap Rate (4.52%) & NOI	$ 10,647,211
Gross Rent Multiplier	$ 10,655,068

Sale Proceeds

Projected Selling Price	$ 14,563,575
Costs of Sale (6.00%)	$ 873,815
Net Sale Proceeds Before Tax	$ 13,689,761

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	$ 13,689,761
Investor Cash Outlay	$ 2,235,500
Net Assets	$ 11,454,261
Average Yield
Annual Net Assets	$ 381,809
Average Cash Flow (After Taxes)	$ 110,373
Average Annual Gain (After Taxes)	$ 492,181
Average Annual Yield (After Taxes)	10.36 %

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: CWV Facility RENTAL

Property Report :

CWV Facility

209 Upshur St NW, Washington, DC 20011

Executive Summary

209 Upshur St NW, Washington, DC 20011

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

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

Loan to Value Ratio

Loan to Value Ratio

Loan to Cost Ratio

Loan to Cost Ratio

Long-term Cash Flow Forecast

Resale Analysis

Resale Price Evaluation Methods

Sale Proceeds

Net Assets and Yield

Photos