2350 N Grant Blvd, Milwaukee WI 53210

2350 N Grant Blvd, Milwaukee, WI 53210

Investment strategy: Rental Property

Purchase Price$ 100,000

Rent$ 1,300/mo

Monthly Cash Flow$ 645

Cash on Cash Return7.51 %

Financial Analysis

Cash on Cash Return	7.51 %
Internal Rate of Return (IRR)	8.10 %
Capitalization Rate	7.74 %
Gross Rent Multiplier (GRM)	6.41
Debt-coverage Ratio (DCR)	0.00
Operating Expense Ratio (OER)	49.38 %

Financial Breakdown

Purchase Price	$ 100,000
Purchase Costs	$ 3,000
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).	$ 103,000
Financing	$ 0
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 103,000
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.	$ 103,000

Operating Analysis

Rent	$ 1,300/mo
Gross Operating Income (GOI)	$ 15,288
Total Expenses	$ 7,550
Net Operating Income (NOI)	$ 7,738
Annual Debt Service	$ 0
Cash Flow Before Taxes (CFBT)	$ 7,738
Income Tax Liability	$ 1,207
Cash Flow After Taxes (CFAT)	$ 6,531

Purchase Price	$ 100,000
Address	2350 N Grant Blvd , Milwaukee, 53210, WI

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.	$ 15,600
Total Gross Income	$ 15,600
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.	$ 312
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.	$ 15,288	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	$ 1,223	8.00 %
Insurance	$ 1,400	9.16 %
Property tax	$ 967	6.32 %
Association Dues	$ 3,960	25.90 %
Total Expenses	$ 7,550	49.38 %
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.	$ 7,738	50.62 %

Cash Flow (Year 1)

Net Operating Income	$ 7,738	50.62 %
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.	$ 7,738	50.62 %
Income Tax Liability	$ 1,207	7.90 %
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.	$ 6,531	42.72 %

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).	49.38 %
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.	49.38 %

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.	$ 59,951
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.	8.10 %
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	1.58
Annual Depreciation	$ 2,909

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.	7.51 %
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.	9.45 %
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.	7.74 %
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.	15.60 %
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.	6.41

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	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	15,600	15,912	16,230	16,555	16,886	17,224	17,568	17,919	18,278	18,643	19,016	19,397	19,785	20,180	20,584	20,996	21,415	21,844	22,281	22,726	23,181	23,644	24,117	24,600	25,092	25,593	26,105	26,627	27,160	27,703
Vacancy Loss	0	312	318	325	331	338	344	351	358	366	373	380	388	396	404	412	420	428	437	446	455	464	473	482	492	502	512	522	533	543	554
Gross Operating Income	0	15,288	15,594	15,906	16,224	16,548	16,879	17,217	17,561	17,912	18,271	18,636	19,009	19,389	19,777	20,172	20,576	20,987	21,407	21,835	22,272	22,717	23,172	23,635	24,108	24,590	25,082	25,583	26,095	26,617	27,149
Expenses	0	7,550	7,701	7,855	8,012	8,172	8,336	8,502	8,672	8,846	9,023	9,203	9,387	9,575	9,767	9,962	10,161	10,364	10,572	10,783	10,999	11,219	11,443	11,672	11,905	12,144	12,386	12,634	12,887	13,145	13,407
Net Operating Income	0	7,738	7,893	8,051	8,212	8,376	8,544	8,714	8,889	9,066	9,248	9,433	9,621	9,814	10,010	10,210	10,414	10,623	10,835	11,052	11,273	11,498	11,728	11,963	12,202	12,446	12,695	12,949	13,208	13,472	13,742
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	-103,000	7,738	7,893	8,051	8,212	8,376	8,544	8,714	8,889	9,066	9,248	9,433	9,621	9,814	10,010	10,210	10,414	10,623	10,835	11,052	11,273	11,498	11,728	11,963	12,202	12,446	12,695	12,949	13,208	13,472	13,742
Depreciation	0	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909	2,909
Taxes	0	1,207	1,246	1,285	1,326	1,367	1,409	1,451	1,495	1,539	1,585	1,631	1,678	1,726	1,775	1,825	1,876	1,928	1,982	2,036	2,091	2,147	2,205	2,263	2,323	2,384	2,447	2,510	2,575	2,641	2,708
Cash Flow After Taxes	-103,000	6,531	6,647	6,765	6,886	7,009	7,135	7,263	7,394	7,527	7,663	7,802	7,943	8,088	8,235	8,385	8,538	8,694	8,854	9,016	9,182	9,351	9,524	9,699	9,879	10,062	10,249	10,439	10,633	10,831	11,034

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 (2.00%)	$ 181,136
Cap Rate (7.74%) & NOI	$ 177,541
Gross Rent Multiplier	$ 177,578

Sale Proceeds

Projected Selling Price	$ 181,136
Costs of Sale (6.00%)	$ 10,868
Net Sale Proceeds Before Tax	$ 170,268

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	$ 170,268
Investor Cash Outlay	$ 103,000
Net Assets	$ 67,268
Average Yield
Annual Net Assets	$ 2,242
Average Cash Flow (After Taxes)	$ 8,207
Average Annual Gain (After Taxes)	$ 10,450
Average Annual Yield (After Taxes)	10.45 %

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: 2350 N Grant Blvd, Milwaukee RENTAL

Property Report :

2350 N Grant Blvd, Milwaukee, WI 53210

Executive Summary