24630 Leafwood Dr, Murrieta CA 92562

24630 Leafwood Dr, Murrieta, CA 92562

Singlefamily: 3 bedrooms , 2 bathrooms

Year built: 1988, Size: 1322 SF

Investment strategy: Rental Property

Purchase Price$ 499,900

Rent$ 2,300/mo

Monthly Cash Flow$ -371

Cash on Cash Return-4.20 %

Financial Analysis

Cash on Cash Return	-4.20 %
Internal Rate of Return (IRR)	11.27 %
Capitalization Rate	3.16 %
Gross Rent Multiplier (GRM)	18.11
Debt-coverage Ratio (DCR)	0.78
Operating Expense Ratio (OER)	39.81 %

Financial Breakdown

Purchase Price	$ 499,900
Purchase Costs	$ 6,000
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).	$ 505,900
Financing	$ 399,920
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 105,980
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.	$ 99,980
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.	$ 6,000

Operating Analysis

Rent	$ 2,300/mo
Gross Operating Income (GOI)	$ 26,220
Total Expenses	$ 10,439
Net Operating Income (NOI)	$ 15,781
Annual Debt Service	$ 20,233
Cash Flow Before Taxes (CFBT)	$ -4,452
Income Tax Liability	$ -2,661
Cash Flow After Taxes (CFAT)	$ -1,791

Here's the home you've been looking for! This spacious single story floor plan is perfect for modern living where you'll enter the home into a cozy living room complete with fireplace and recessed lighting. The kitchen was renovated during the past few years with new custom cabinets, stainless appliances, quartz countertops, recessed lighting and ceiling fan. Featuring laminate plank flooring and custom paint throughout much of the home in addition to a new master bath renovation with massive tile shower enclosure. This home backs up to a very private green belt where you can enjoy nature and peace & quiet in your massive backyard under you new aluminum patio cover! An additional benefit is the fact that this property has very low taxes and no HOA! Located in the heart of Murrieta you would be walking distance to Avaxat Elementary School and a short bike ride to Shivela Middle School. There are trails nearby along with several parks and it is just minutes from shopping and freeway access. Hurry, this highly desirable property won't last!

Purchase Price	$ 499,900
Address	24630 Leafwood Dr , Murrieta, 92562, CA
MLS^® #	SW21173686
Listing Agent	Joseph Mc Dermott
Listing Broker	Mcdermott Realty Group
Year Built	1988
Type	Singlefamily
Size	1322 SF
Bedrooms	3
Bathrooms	2

Property History

Date	Price	Change	Event
8/23/2019
4/18/2014
1/25/1989

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	$ 1,800	6.86 %
Capex	$ 1,200	4.58 %
Repairs	$ 1,200	4.58 %
Property tax	$ 4,739	18.07 %
Insurance	$ 1,500	5.72 %
Total Expenses	$ 10,439	39.81 %
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.	$ 15,781	60.19 %

Cash Flow (Year 1)

Net Operating Income	$ 15,781	60.19 %
Annual Debt Service	$ 20,233	77.17 %
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.	$ -4,452	-16.98 %
Income Tax Liability	$ -2,661	-10.15 %
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.	$ -1,791	-6.83 %

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).	39.81 %
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.	116.98 %

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.	$ 86,961
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.	11.27 %
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	1.82
Annual Depreciation	$ 14,543

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.	-4.20 %
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.	9.95 %
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.	3.16 %
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.	5.52 %
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.	18.11

Financing
Down Payment		$ 99,980
Loan		$ 399,920
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		0.78

Loan Financing of: Purchase price ($ 499,900)
Type	Amortized
Loan Amount	$ 399,920
Down payment (20%)	$ 99,980
Amortization	30 years
Interest Rate	3.00 %
Monthly Payment	$ 1,686.08

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	27,600	28,152	28,715	29,289	29,875	30,473	31,082	31,704	32,338	32,985
Vacancy Loss	0	1,380	1,408	1,436	1,464	1,494	1,524	1,554	1,585	1,617	1,649
Gross Operating Income	0	26,220	26,744	27,279	27,825	28,381	28,949	29,528	30,119	30,721	31,335
Expenses	0	10,439	10,648	10,861	11,078	11,300	11,526	11,756	11,991	12,231	12,476
Net Operating Income	0	15,781	16,097	16,419	16,747	17,082	17,424	17,772	18,127	18,490	18,860
Loan Payment	0	20,233	20,233	20,233	20,233	20,233	20,233	20,233	20,233	20,233	20,233
Payment Interest Part	0	11,883	11,629	11,368	11,098	10,820	10,534	10,239	9,935	9,622	9,299
Payment Principal Part	0	8,350	8,603	8,865	9,135	9,413	9,699	9,994	10,298	10,611	10,934
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-105,980	-4,452	-4,136	-3,814	-3,486	-3,151	-2,809	-2,461	-2,106	-1,743	-1,373
Depreciation	0	14,543	14,543	14,543	14,543	14,543	14,543	14,543	14,543	14,543	14,543
Taxes	0	-2,661	-2,519	-2,373	-2,224	-2,070	-1,913	-1,753	-1,588	-1,419	-1,246
Cash Flow After Taxes	-105,980	-1,791	-1,617	-1,441	-1,262	-1,081	-896	-708	-518	-324	-128

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%)	$ 671,824
Cap Rate (3.16%) & NOI	$ 596,828
Gross Rent Multiplier	$ 597,350

Sale Proceeds

Projected Selling Price	$ 671,824
Costs of Sale (6.00%)	$ 40,309
1. Loan Balance Payoff	$ 304,018
Net Sale Proceeds Before Tax	$ 327,496

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	$ 327,496
Investor Cash Outlay	$ 105,980
Net Assets	$ 221,516
Average Yield
Annual Net Assets	$ 22,152
Average Cash Flow (After Taxes)	$ -964
Average Annual Gain (After Taxes)	$ 21,188
Average Annual Yield (After Taxes)	4.24 %

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: 24630 Leafwood Dr, Murrieta RENTAL

Property Report :

24630 Leafwood Dr, Murrieta, CA 92562

Executive Summary