288 McGregor Ave, Cincinnati OH 45219

288 McGregor Ave, Cincinnati, OH 45219

Multifamily:

Year built: 1890, Size: 3088 SF

Investment strategy: Rental Property

Purchase Price$ 349,000

Rent$ 3,250/mo

Monthly Cash Flow$ 622

Cash on Cash Return8.44 %

Financial Analysis

Cash on Cash Return	8.44 %
Internal Rate of Return (IRR)	16.51 %
Capitalization Rate	7.54 %
Gross Rent Multiplier (GRM)	8.95
Debt-coverage Ratio (DCR)	1.40
Operating Expense Ratio (OER)	30.19 %

Financial Breakdown

Purchase Price	$ 349,000
Purchase Costs	$ 1,200
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).	$ 350,200
Financing	$ 261,750
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 88,450
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.	$ 87,250
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.	$ 1,200

Operating Analysis

Rent	$ 3,250/mo
Gross Operating Income (GOI)	$ 37,674
Total Expenses	$ 11,373
Net Operating Income (NOI)	$ 26,301
Annual Debt Service	$ 18,832
Cash Flow Before Taxes (CFBT)	$ 7,469
Income Tax Liability	$ 132
Cash Flow After Taxes (CFAT)	$ 7,336

Agent owned. Major updates, stainless steel appliances in each unit. Great cash flow opportunity for investor/owner occupied. Apt 1 & Apt 2 currently month to month. Walking to UC & Christ Hospital. Minutes from casino and downtown. Each unit has their own garage. Located on corner of quiet street.

Purchase Price	$ 349,000
Address	288 McGregor Ave , Cincinnati, 45219, OH
MLS^® #	1762321
Listing Agent	Kenneth Bibb
Listing Broker	Coldwell Banker Realty
Year Built	1890
Type	Multifamily
Number of Units
Size	3088 SF

Property History

Date	Price	Change	Event
5/8/2014
6/30/2004
12/21/2000
1/1/1984

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.	$ 39,000
Total Gross Income	$ 39,000
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.	$ 1,326
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.	$ 37,674	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).
Repairs	$ 753	2.00 %
Property tax	$ 8,316	22.07 %
Insurance	$ 1,044	2.77 %
WATER	$ 1,260	3.34 %
Total Expenses	$ 11,373	30.19 %
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.	$ 26,301	69.81 %

Cash Flow (Year 1)

Net Operating Income	$ 26,301	69.81 %
Annual Debt Service	$ 18,832	49.99 %
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.	$ 7,469	19.82 %
Income Tax Liability	$ 132	0.35 %
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.	$ 7,336	19.47 %

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).	30.19 %
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.	80.18 %

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.	$ 115,689
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.	16.51 %
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	2.31
Annual Depreciation	$ 10,153

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.	8.44 %
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.	20.28 %
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.	7.54 %
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.	11.17 %
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.	8.95

Financing
Down Payment		$ 87,250
Loan		$ 261,750
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		1.40

Loan Financing of: Purchase price ($ 349,000)
Type	Amortized
Loan Amount	$ 261,750
Down payment (25%)	$ 87,250
Amortization	30 years
Interest Rate	6.00 %
Monthly Payment	$ 1,569.32

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	39,000	39,780	40,576	41,387	42,215	43,059	43,920	44,799	45,695	46,609
Vacancy Loss	0	1,326	1,353	1,380	1,407	1,435	1,464	1,493	1,523	1,554	1,585
Gross Operating Income	0	37,674	38,427	39,196	39,980	40,780	41,595	42,427	43,276	44,141	45,024
Expenses	0	11,373	11,601	11,833	12,070	12,311	12,557	12,808	13,065	13,326	13,592
Net Operating Income	0	26,301	26,827	27,363	27,910	28,469	29,038	29,619	30,211	30,815	31,432
Loan Payment	0	18,832	18,832	18,832	18,832	18,832	18,832	18,832	18,832	18,832	18,832
Payment Interest Part	0	15,618	15,419	15,209	14,985	14,748	14,496	14,229	13,945	13,644	13,324
Payment Principal Part	0	3,214	3,413	3,623	3,847	4,084	4,336	4,603	4,887	5,188	5,508
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-88,450	7,469	7,995	8,531	9,078	9,637	10,206	10,787	11,379	11,983	12,600
Depreciation	0	10,153	10,153	10,153	10,153	10,153	10,153	10,153	10,153	10,153	10,153
Taxes	0	132	314	500	693	892	1,097	1,309	1,528	1,755	1,989
Cash Flow After Taxes	-88,450	7,336	7,681	8,031	8,385	8,745	9,109	9,478	9,851	10,229	10,611

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%)	$ 469,027
Cap Rate (7.54%) & NOI	$ 416,864
Gross Rent Multiplier	$ 417,147

Sale Proceeds

Projected Selling Price	$ 469,027
Costs of Sale (6.00%)	$ 28,142
1. Loan Balance Payoff	$ 219,047
Net Sale Proceeds Before Tax	$ 221,838

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	$ 221,838
Investor Cash Outlay	$ 88,450
Net Assets	$ 133,388
Average Yield
Annual Net Assets	$ 13,339
Average Cash Flow (After Taxes)	$ 7,884
Average Annual Gain (After Taxes)	$ 21,223
Average Annual Yield (After Taxes)	6.08 %

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: 288 McGregor Ave, Cincinnati RENTAL

Property Report :

288 McGregor Ave, Cincinnati, OH 45219

Executive Summary