234 E Park Ave, Waukesha WI 53186

234 E Park Ave, Waukesha, WI 53186

Multifamily:

Year built: 1900,

Investment strategy: Rental Property

Purchase Price$ 309,900

Rent$ 2,300/mo

Monthly Cash Flow$ 303

Cash on Cash Return4.69 %

Financial Analysis

Cash on Cash Return	4.69 %
Internal Rate of Return (IRR)	13.02 %
Capitalization Rate	6.43 %
Gross Rent Multiplier (GRM)	11.23
Debt-coverage Ratio (DCR)	1.22
Operating Expense Ratio (OER)	23.96 %

Financial Breakdown

Purchase Price	$ 309,900
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).	$ 309,900
Financing	$ 232,425
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 77,475
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.	$ 77,475
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	$ 2,300/mo
Gross Operating Income (GOI)	$ 26,220
Total Expenses	$ 6,282
Net Operating Income (NOI)	$ 19,938
Annual Debt Service	$ 16,305
Cash Flow Before Taxes (CFBT)	$ 3,634
Income Tax Liability	$ -147
Cash Flow After Taxes (CFAT)	$ 3,781

Investor's and Flipper's dream! Owners selling after 35 yrs. Located on a quiet one-way street, walking distance to Carroll College, library and historic downtown. Unit #2 has 1 bedroom, kitchen and full bath. Unit #3 studio with kitchen and full bath. Both upper units share a balcony and are freshly painted and carpeted. Main floor unit with 2 bedrooms/1.5 baths, lots of storage and large kitchen. Each unit has its own garage in addition to plenty of surface parking. Walk up attic for additional storage (access unit #2). Full basement with shared washer and dryer. Roof of home and garage replaced 2011. Newer siding and windows. Furnace 2013. Water heater 2019.

Purchase Price	$ 309,900
Address	234 E Park Ave , Waukesha, 53186, WI
MLS^® #	1744806
Listing Agent	Martha Ford
Listing Broker	First Weber Group
Year Built	1900
Type	Multifamily
Number of Units

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.	$ 27,600
Total Gross Income	$ 27,600
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.	$ 1,380
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.	$ 26,220	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	$ 2,098	8.00 %
Property tax	$ 2,984	11.38 %
Insurance	$ 1,200	4.58 %
Total Expenses	$ 6,282	23.96 %
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.	$ 19,938	76.04 %

Cash Flow (Year 1)

Net Operating Income	$ 19,938	76.04 %
Annual Debt Service	$ 16,305	62.18 %
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.	$ 3,634	13.86 %
Income Tax Liability	$ -147	-0.56 %
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.	$ 3,781	14.42 %

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).	23.96 %
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.	86.14 %

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.	$ 171,943
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.	13.02 %
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	3.22
Annual Depreciation	$ 9,015

Holding period of 20 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.	4.69 %
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.	16.69 %
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.	6.43 %
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.	8.91 %
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.	11.23

Financing
Down Payment		$ 77,475
Loan		$ 232,425
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).		75.00 %
Debt Coverage Ratio		1.22

Loan Financing of: Purchase price ($ 309,900)
Type	Amortized
Loan Amount	$ 232,425
Down payment (25%)	$ 77,475
Amortization	25 years
Interest Rate	5.00 %
Monthly Payment	$ 1,358.73

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
Operational Analysis
Gross Scheduled Income	0	27,600	28,152	28,715	29,289	29,875	30,473	31,082	31,704	32,338	32,985	33,644	34,317	35,003	35,704	36,418	37,146	37,889	38,647	39,420	40,208
Vacancy Loss	0	1,380	1,408	1,436	1,464	1,494	1,524	1,554	1,585	1,617	1,649	1,682	1,716	1,750	1,785	1,821	1,857	1,894	1,932	1,971	2,010
Gross Operating Income	0	26,220	26,744	27,279	27,825	28,381	28,949	29,528	30,119	30,721	31,335	31,962	32,601	33,253	33,918	34,597	35,289	35,994	36,714	37,449	38,198
Expenses	0	6,282	6,407	6,535	6,666	6,799	6,935	7,074	7,216	7,360	7,507	7,657	7,810	7,967	8,126	8,288	8,454	8,623	8,796	8,972	9,151
Net Operating Income	0	19,938	20,337	20,744	21,159	21,582	22,014	22,454	22,903	23,361	23,828	24,305	24,791	25,287	25,792	26,308	26,834	27,371	27,919	28,477	29,046
Loan Payment	0	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305	16,305
Payment Interest Part	0	11,512	11,267	11,009	10,739	10,454	10,154	9,840	9,509	9,161	8,796	8,412	8,008	7,583	7,137	6,668	6,175	5,657	5,112	4,539	3,938
Payment Principal Part	0	4,792	5,038	5,295	5,566	5,851	6,150	6,465	6,796	7,143	7,509	7,893	8,297	8,721	9,168	9,637	10,130	10,648	11,193	11,765	12,367
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
Cash Flow Before Taxes	-77,475	3,634	4,032	4,439	4,854	5,277	5,709	6,149	6,598	7,056	7,523	8,000	8,486	8,982	9,488	10,004	10,530	11,066	11,614	12,172	12,742
Depreciation	0	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015	9,015
Taxes	0	-147	14	180	351	528	711	900	1,095	1,296	1,504	1,720	1,942	2,172	2,410	2,656	2,911	3,175	3,448	3,731	4,023
Cash Flow After Taxes	-77,475	3,781	4,019	4,259	4,503	4,749	4,998	5,249	5,503	5,760	6,019	6,280	6,544	6,810	7,078	7,347	7,619	7,892	8,166	8,442	8,718

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 20 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 559,714
Cap Rate (6.43%) & NOI	$ 451,734
Gross Rent Multiplier	$ 451,536

Sale Proceeds

Projected Selling Price	$ 559,714
Costs of Sale (3.00%)	$ 16,791
1. Loan Balance Payoff	$ 72,000
Net Sale Proceeds Before Tax	$ 470,922

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	$ 470,922
Investor Cash Outlay	$ 77,475
Net Assets	$ 393,447
Average Yield
Annual Net Assets	$ 19,672
Average Cash Flow (After Taxes)	$ 5,751
Average Annual Gain (After Taxes)	$ 25,423
Average Annual Yield (After Taxes)	8.20 %

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: 234 E Park Ave, Waukesha RENTAL

Property Report :

234 E Park Ave, Waukesha, WI 53186

Executive Summary