25219 Ridgeplume Dr, Murrieta CA 92563

25219 Ridgeplume Dr, Murrieta, CA 92563

Singlefamily: 3 bedrooms , 2 bathrooms

Year built: 1988, Size: 1211 SF

Investment strategy: Rental Property

Purchase Price$ 440,000

Rent$ 2,600/mo

Monthly Cash Flow$ 1,672

Cash on Cash Return20.90 %

Financial Analysis

Cash on Cash Return	20.90 %
Internal Rate of Return (IRR)	22.52 %
Capitalization Rate	4.56 %
Gross Rent Multiplier (GRM)	14.10
Debt-coverage Ratio (DCR)	0.00
Operating Expense Ratio (OER)	32.32 %

Financial Breakdown

Purchase Price	$ 440,000
Purchase Costs	$ 8,000
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).	$ 448,000
Financing	$ 352,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 96,000
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.	$ 88,000
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.	$ 8,000

Operating Analysis

Rent	$ 2,600/mo
Gross Operating Income (GOI)	$ 29,640
Total Expenses	$ 9,581
Net Operating Income (NOI)	$ 20,059
Annual Debt Service	$ 0
Cash Flow Before Taxes (CFBT)	$ 20,059
Income Tax Liability	$ 1,815
Cash Flow After Taxes (CFAT)	$ 18,245

Welcome to your beautiful Murrieta Home! This property has features that include, but are not limited to; 3 Bedrooms / 2 Bathrooms, a beautiful kitchen with granite countertops, updated bathrooms, laminated flooring throughout the home! This home also includes a gas fireplace, recessed lighting, upgraded windows, white blinds and an attached 2 car garage with two additional driveway parking spaces. All appliances are negotiable and may be included. This is a must see!

Purchase Price	$ 440,000
Address	25219 Ridgeplume Dr , Murrieta, 92563, CA
MLS^® #	PW21172694
Listing Agent	Abigail Ruiz
Listing Broker	CENTURY 21 Masters
Year Built	1988
Type	Singlefamily
Size	1211 SF
Bedrooms	3
Bathrooms	2

Property History

Date	Price	Change	Event
5/25/2018
9/19/2008
4/15/2005
3/19/2003

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.	$ 31,200
Total Gross Income	$ 31,200
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.	$ 1,560
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.	$ 29,640	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	$ 2,668	9.00 %
Repairs	$ 1,200	4.05 %
Property tax	$ 4,393	14.82 %
Insurance	$ 1,320	4.45 %
Total Expenses	$ 9,581	32.32 %
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.	$ 20,059	67.68 %

Cash Flow (Year 1)

Net Operating Income	$ 20,059	67.68 %
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.	$ 20,059	67.68 %
Income Tax Liability	$ 1,815	6.12 %
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.	$ 18,245	61.55 %

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).	32.32 %
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.	32.32 %

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.	$ 254,684
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.	22.52 %
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	3.65
Annual Depreciation	$ 12,800

Holding period of 15 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.	20.90 %
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.	34.65 %
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.	4.56 %
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.	7.09 %
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.	14.10

Financing
Down Payment		$ 88,000
Loan		$ 352,000
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		0.00

Loan Financing of: Purchase price ($ 440,000)
Type	Amortized
Loan Amount	$ 352,000
Down payment (20%)	$ 88,000
Amortization	30 years
Interest Rate	0.00 %
Monthly Payment	$ 0.00

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
Operational Analysis
Gross Scheduled Income	0	31,200	31,824	32,460	33,110	33,772	34,447	35,136	35,839	36,556	37,287	38,033	38,793	39,569	40,361	41,168
Vacancy Loss	0	1,560	1,591	1,623	1,655	1,689	1,722	1,757	1,792	1,828	1,864	1,902	1,940	1,978	2,018	2,058
Gross Operating Income	0	29,640	30,233	30,837	31,454	32,083	32,725	33,379	34,047	34,728	35,423	36,131	36,854	37,591	38,343	39,109
Expenses	0	9,581	9,772	9,968	10,167	10,370	10,578	10,789	11,005	11,225	11,450	11,679	11,912	12,151	12,394	12,641
Net Operating Income	0	20,059	20,461	20,870	21,287	21,713	22,147	22,590	23,042	23,503	23,973	24,452	24,941	25,440	25,949	26,468
Loan Payment	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Payment Interest Part	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Payment Principal Part	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-96,000	20,059	20,461	20,870	21,287	21,713	22,147	22,590	23,042	23,503	23,973	24,452	24,941	25,440	25,949	26,468
Depreciation	0	12,800	12,800	12,800	12,800	12,800	12,800	12,800	12,800	12,800	12,800	12,800	12,800	12,800	12,800	12,800
Taxes	0	1,815	1,915	2,017	2,122	2,228	2,337	2,448	2,560	2,676	2,793	2,913	3,035	3,160	3,287	3,417
Cash Flow After Taxes	-96,000	18,245	18,545	18,852	19,165	19,485	19,810	20,143	20,481	20,827	21,180	21,539	21,906	22,280	22,662	23,051

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 15 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 685,506
Cap Rate (4.56%) & NOI	$ 580,438
Gross Rent Multiplier	$ 580,465

Sale Proceeds

Projected Selling Price	$ 685,506
Costs of Sale (6.00%)	$ 41,130
1. Loan Balance Payoff	$ 352,000
Net Sale Proceeds Before Tax	$ 292,376

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	$ 292,376
Investor Cash Outlay	$ 96,000
Net Assets	$ 196,376
Average Yield
Annual Net Assets	$ 13,092
Average Cash Flow (After Taxes)	$ 19,008
Average Annual Gain (After Taxes)	$ 32,100
Average Annual Yield (After Taxes)	7.30 %

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: 25219 Ridgeplume Dr, Murrieta RENTAL

Property Report :

25219 Ridgeplume Dr, Murrieta, CA 92563

Executive Summary