23 Church Road, Grand Falls-Windsor NL A2A1Z4, CA

23 Church Road, Grand Falls-Windsor, NL A2A1Z4

Multi-Family:

Year built: 2008, Size: 13339 SF

Investment strategy: Rental Property

Purchase Price$ 1,200,000

Rent$ 11,200/mo

Monthly Cash Flow$ 1,414

Cash on Cash Return7.07 %

Financial Analysis

Cash on Cash Return	7.07 %
Internal Rate of Return (IRR)	18.74 %
Capitalization Rate	7.84 %
Gross Rent Multiplier (GRM)	8.93
Debt-coverage Ratio (DCR)	1.22
Operating Expense Ratio (OER)	27.79 %

Financial Breakdown

Purchase Price	$ 1,200,000
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).	$ 1,200,000
Financing	$ 960,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 240,000
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.	$ 240,000
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	$ 11,200/mo
Gross Operating Income (GOI)	$ 130,368
Total Expenses	$ 36,232
Net Operating Income (NOI)	$ 94,136
Annual Debt Service	$ 77,164
Cash Flow Before Taxes (CFBT)	$ 16,972
Income Tax Liability	$ -469
Cash Flow After Taxes (CFAT)	$ 17,442

ATTENTION INVESTORS DON'T MISS OUT ON THE OPPORTUNITY TO OWN THESE WELL CONSTRUCTED UNITS! These adult living rental units are centrally located in the town of Grand Falls-Windsor within walking distance to downtown, several churches & Church Road Park makes these units a desirable location to live. This property being sold as a package deal including original main house which was extensively renovated in 2008 plus 3 other buildings consisting of 10 units constructed in 2008. Main house (approx. 1417 SF) consists of main floor living room, dining room-kitchen combination, 2 piece bath, front & rear foyers; second floor has 2 spacious bedrooms & full bathroom; full basement utilized for laundry & storage. Two buildings (approx. 3564 SF per building) both contain 3 self contained 2 bedroom units with a full basement under both buildings. Half of both basements utilized for landlords use with separate meters & a half bath in one section. Third building (approx. 4,794 SF including main floor units & ground level unit) has 3 - 2 bedroom units on main floor with a spacious ground level 2 bedroom unit. Nine of the 2 bedroom main floor units all have a partial basement area for storage & utility area. All units include fridge, stove, dishwasher, washer & dryers. Lot has been fully landscaped with numerous planters & decks in place; plenty of asphalt parking in place for tenants. (27471152)

Purchase Price	$ 1,200,000
Address	23 Church Road , Grand Falls-Windsor, A2A1Z4, NL, CA
MLS^® #	1264725
Year Built	2008
Type	Multi-Family
Size	13339 SF

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.	$ 134,400
Total Gross Income	$ 134,400
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.	$ 4,032
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.	$ 130,368	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).
Security Lights (NL Power)	$ 844	0.65 %
Property Insurance	$ 21,082	16.17 %
Water Rate	$ 5,450	4.18 %
Property Tax	$ 8,856	6.79 %
Total Expenses	$ 36,232	27.79 %
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.	$ 94,136	72.21 %

Cash Flow (Year 1)

Net Operating Income	$ 94,136	72.21 %
Annual Debt Service	$ 77,164	59.19 %
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.	$ 16,972	13.02 %
Income Tax Liability	$ -469	-0.36 %
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.	$ 17,442	13.38 %

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).	27.79 %
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.	86.98 %

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.	$ 436,453
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.	18.74 %
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	2.82
Annual Depreciation	$ 34,909

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.	7.07 %
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.	22.07 %
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.	7.84 %
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.	11.20 %
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.	8.93

Financing
Down Payment		$ 240,000
TD		$ 960,000
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		1.22

TD Financing of: Purchase price ($ 1,200,000)
Type	Amortized
Loan Amount	$ 960,000
Down payment (20%)	$ 240,000
Amortization	25 years
Interest Rate	6.50 %
Monthly Payment	$ 6,430.31

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	134,400	137,088	139,830	142,626	145,479	148,388	151,356	154,383	157,471	160,620
Vacancy Loss	0	4,032	4,113	4,195	4,279	4,364	4,452	4,541	4,632	4,724	4,819
Gross Operating Income	0	130,368	132,975	135,635	138,348	141,115	143,937	146,816	149,752	152,747	155,802
Expenses	0	36,232	36,957	37,696	38,450	39,219	40,003	40,803	41,619	42,452	43,301
Net Operating Income	0	94,136	96,019	97,939	99,898	101,896	103,934	106,012	108,133	110,295	112,501
Loan Payment	0	77,164	77,164	77,164	77,164	77,164	77,164	77,164	77,164	77,164	77,164
Payment Interest Part	0	61,105	60,044	58,913	57,708	56,422	55,052	53,592	52,035	50,375	48,605
Payment Principal Part	0	16,059	17,120	18,251	19,456	20,741	22,111	23,572	25,129	26,789	28,559
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-240,000	16,972	18,855	20,775	22,734	24,732	26,770	28,849	30,969	33,132	35,338
Depreciation	0	34,909	34,909	34,909	34,909	34,909	34,909	34,909	34,909	34,909	34,909
Taxes	0	-469	266	1,029	1,820	2,641	3,493	4,378	5,297	6,253	7,247
Cash Flow After Taxes	-240,000	17,442	18,589	19,746	20,914	22,091	23,277	24,471	25,672	26,879	28,091

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%)	$ 1,612,700
Cap Rate (7.84%) & NOI	$ 1,434,965
Gross Rent Multiplier	$ 1,434,341

Sale Proceeds

Projected Selling Price	$ 1,612,700
Costs of Sale (3.00%)	$ 48,381
1. Loan Balance Payoff	$ 742,213
Net Sale Proceeds Before Tax	$ 822,106

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	$ 822,106
Investor Cash Outlay	$ 240,000
Net Assets	$ 582,106
Average Yield
Annual Net Assets	$ 58,211
Average Cash Flow (After Taxes)	$ 19,908
Average Annual Gain (After Taxes)	$ 78,119
Average Annual Yield (After Taxes)	6.51 %

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: 23 Church Road, Grand Falls-Windsor RENTAL

Property Report :

23 Church Road, Grand Falls-Windsor, NL A2A1Z4

Executive Summary