2570 N 39th St, Milwaukee WI 53210

2570 N 39th St, Milwaukee, WI 53210

Multifamily:

Investment strategy: Rental Property

Purchase Price$ 95,000

Rent$ 1,550/mo

Monthly Cash Flow$ 867

Cash on Cash Return10.95 %

Financial Analysis

Cash on Cash Return	10.95 %
Internal Rate of Return (IRR)	10.78 %
Capitalization Rate	10.95 %
Gross Rent Multiplier (GRM)	5.11
Debt-coverage Ratio (DCR)	0.00
Operating Expense Ratio (OER)	39.85 %

Financial Breakdown

Purchase Price	$ 95,000
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).	$ 95,000
Financing	$ 0
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 95,000
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.	$ 95,000

Operating Analysis

Rent	$ 1,550/mo
Gross Operating Income (GOI)	$ 17,298
Total Expenses	$ 6,894
Net Operating Income (NOI)	$ 10,404
Annual Debt Service	$ 0
Cash Flow Before Taxes (CFBT)	$ 10,404
Income Tax Liability	$ 1,910
Cash Flow After Taxes (CFAT)	$ 8,494

Purchase Price	$ 95,000
Address	2570 N 39th St , Milwaukee, 53210, WI
Type	Multifamily
Number of Units	2

Unit	Rent
Lower	$ 775/mo
Upper	$ 775/mo

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.	$ 18,600
Total Gross Income	$ 18,600
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.	$ 1,302
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.	$ 17,298	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	$ 1,384	8.00 %
Utilities	$ 500	2.89 %
Insurance	$ 1,400	8.09 %
Repairs	$ 2,595	15.00 %
Property tax	$ 1,015	5.87 %
Total Expenses	$ 6,894	39.85 %
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.	$ 10,404	60.15 %

Cash Flow (Year 1)

Net Operating Income	$ 10,404	60.15 %
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.	$ 10,404	60.15 %
Income Tax Liability	$ 1,910	11.04 %
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.	$ 8,494	49.11 %

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).	39.85 %
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.	39.85 %

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.	$ 104,146
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.	10.78 %
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	2.10
Annual Depreciation	$ 2,764

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.	10.95 %
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.	12.95 %
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.	10.95 %
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.	19.58 %
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.	5.11

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	18,600	18,972	19,351	19,738	20,133	20,536	20,947	21,366	21,793	22,229	22,673	23,127	23,589	24,061	24,542	25,033	25,534	26,045	26,565	27,097	27,639	28,191	28,755	29,330	29,917	30,515	31,126	31,748	32,383	33,031
Vacancy Loss	0	1,302	1,328	1,355	1,382	1,409	1,438	1,466	1,496	1,526	1,556	1,587	1,619	1,651	1,684	1,718	1,752	1,787	1,823	1,860	1,897	1,935	1,973	2,013	2,053	2,094	2,136	2,179	2,222	2,267	2,312
Gross Operating Income	0	17,298	17,644	17,997	18,357	18,724	19,098	19,480	19,870	20,267	20,673	21,086	21,508	21,938	22,377	22,824	23,281	23,746	24,221	24,706	25,200	25,704	26,218	26,742	27,277	27,823	28,379	28,947	29,526	30,116	30,719
Expenses	0	6,894	7,031	7,172	7,315	7,462	7,611	7,763	7,918	8,077	8,238	8,403	8,571	8,743	8,917	9,096	9,278	9,463	9,653	9,846	10,043	10,243	10,448	10,657	10,870	11,088	11,310	11,536	11,766	12,002	12,242
Net Operating Income	0	10,404	10,613	10,825	11,041	11,262	11,487	11,717	11,951	12,191	12,434	12,683	12,937	13,195	13,459	13,729	14,003	14,283	14,569	14,860	15,157	15,461	15,770	16,085	16,407	16,735	17,070	17,411	17,759	18,114	18,477
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	-95,000	10,404	10,613	10,825	11,041	11,262	11,487	11,717	11,951	12,191	12,434	12,683	12,937	13,195	13,459	13,729	14,003	14,283	14,569	14,860	15,157	15,461	15,770	16,085	16,407	16,735	17,070	17,411	17,759	18,114	18,477
Depreciation	0	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764	2,764
Taxes	0	1,910	1,962	2,015	2,069	2,125	2,181	2,238	2,297	2,357	2,418	2,480	2,543	2,608	2,674	2,741	2,810	2,880	2,951	3,024	3,098	3,174	3,251	3,330	3,411	3,493	3,576	3,662	3,749	3,838	3,928
Cash Flow After Taxes	-95,000	8,494	8,650	8,810	8,972	9,138	9,307	9,479	9,655	9,834	10,017	10,203	10,394	10,588	10,785	10,987	11,193	11,403	11,618	11,836	12,059	12,286	12,518	12,755	12,996	13,242	13,493	13,749	14,010	14,277	14,549

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%)	$ 172,079
Cap Rate (10.95%) & NOI	$ 168,737
Gross Rent Multiplier	$ 168,787

Sale Proceeds

Projected Selling Price	$ 172,079
Costs of Sale (6.00%)	$ 10,325
Net Sale Proceeds Before Tax	$ 161,754

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	$ 161,754
Investor Cash Outlay	$ 95,000
Net Assets	$ 66,754
Average Yield
Annual Net Assets	$ 2,225
Average Cash Flow (After Taxes)	$ 10,758
Average Annual Gain (After Taxes)	$ 12,983
Average Annual Yield (After Taxes)	13.67 %

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: 2570 N 39th St, Milwaukee RENTAL

Property Report :

2570 N 39th St, Milwaukee, WI 53210

Executive Summary