3410 NE 12th St, Gainesville FL 32609

3410 NE 12th St, Gainesville, FL 32609

Singlefamily: 4 bedrooms , 2 bathrooms

Year built: 1971, Size: 1294 SF

Investment strategy: Rental Property

Purchase Price$ 224,707

Rent$ 2,100/mo

Monthly Cash Flow$ 580

Cash on Cash Return14.37 %

Financial Analysis

Cash on Cash Return	14.37 %
Internal Rate of Return (IRR)	21.06 %
Capitalization Rate	7.15 %
Gross Rent Multiplier (GRM)	8.92
Debt-coverage Ratio (DCR)	1.77
Operating Expense Ratio (OER)	32.93 %

Financial Breakdown

Purchase Price	$ 224,707
Purchase Costs	$ 3,500
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).	$ 228,207
Financing	$ 179,766
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 48,441
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.	$ 44,941
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.	$ 3,500

Operating Analysis

Rent	$ 2,100/mo
Gross Operating Income (GOI)	$ 23,940
Total Expenses	$ 7,884
Net Operating Income (NOI)	$ 16,056
Annual Debt Service	$ 9,095
Cash Flow Before Taxes (CFBT)	$ 6,961
Income Tax Liability	$ 1,044
Cash Flow After Taxes (CFAT)	$ 5,917

4 bedroom, 2 bath home of 1, 294 Square Feet on .22 acre lot in Highland Court Manor. New appliances, new LVP flooring, new paint and trim, new windows, new granite counter tops, new exterior paint, new roof, all wood cabinets, granite countertops, new appliances, new roof, nice fenced back yard with mature trees, luxury vinyl plank throughout, new paint inside and out, new windows, bonus laundry/office.

Purchase Price	$ 224,707
Address	3410 NE 12th St , Gainesville, 32609, FL
MLS^® #	446969
Listing Agent	Craig Wilburn
Listing Broker	Keller Williams Gainesville Realty Partners
Year Built	1971
Type	Singlefamily
Size	1294 SF
Bedrooms	4
Bathrooms	2

Property History

Date	Price	Change	Event
3/21/2017
5/10/2002
10/18/2001
9/28/1990
5/1/1987

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.	$ 25,200
Total Gross Income	$ 25,200
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.	$ 1,260
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.	$ 23,940	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	$ 2,394	10.00 %
Repairs	$ 1,197	5.00 %
Property tax	$ 1,197	5.00 %
Property tax	$ 2,088	8.72 %
Insurance	$ 1,008	4.21 %
Total Expenses	$ 7,884	32.93 %
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.	$ 16,056	67.07 %

Cash Flow (Year 1)

Net Operating Income	$ 16,056	67.07 %
Annual Debt Service	$ 9,095	37.99 %
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.	$ 6,961	29.08 %
Income Tax Liability	$ 1,044	4.36 %
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.	$ 5,917	24.72 %

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).	32.93 %
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.	70.92 %

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.	$ 94,669
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.	21.06 %
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	2.95
Annual Depreciation	$ 6,537

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.	14.37 %
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.	28.29 %
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.	7.15 %
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.	11.21 %
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.	8.92

Financing
Down Payment		$ 44,941
Loan		$ 179,766
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		1.77

Loan Financing of: Purchase price ($ 224,707)
Type	Amortized
Loan Amount	$ 179,766
Down payment (20%)	$ 44,941
Amortization	30 years
Interest Rate	3.00 %
Monthly Payment	$ 757.90

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	25,200	25,704	26,218	26,742	27,277	27,823	28,379	28,947	29,526	30,116
Vacancy Loss	0	1,260	1,285	1,311	1,337	1,364	1,391	1,419	1,447	1,476	1,506
Gross Operating Income	0	23,940	24,419	24,907	25,405	25,913	26,432	26,960	27,500	28,050	28,611
Expenses	0	7,884	8,042	8,203	8,367	8,534	8,705	8,879	9,056	9,237	9,422
Net Operating Income	0	16,056	16,377	16,705	17,039	17,380	17,727	18,082	18,443	18,812	19,188
Loan Payment	0	9,095	9,095	9,095	9,095	9,095	9,095	9,095	9,095	9,095	9,095
Payment Interest Part	0	5,342	5,227	5,110	4,989	4,864	4,735	4,602	4,466	4,325	4,180
Payment Principal Part	0	3,753	3,867	3,985	4,106	4,231	4,360	4,492	4,629	4,770	4,915
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-48,441	6,961	7,282	7,610	7,944	8,285	8,632	8,987	9,349	9,717	10,094
Depreciation	0	6,537	6,537	6,537	6,537	6,537	6,537	6,537	6,537	6,537	6,537
Taxes	0	1,044	1,153	1,264	1,378	1,495	1,614	1,736	1,860	1,988	2,118
Cash Flow After Taxes	-48,441	5,917	6,129	6,345	6,566	6,790	7,019	7,251	7,488	7,730	7,976

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%)	$ 301,987
Cap Rate (7.15%) & NOI	$ 268,370
Gross Rent Multiplier	$ 268,638

Sale Proceeds

Projected Selling Price	$ 301,987
Costs of Sale (6.00%)	$ 18,119
1. Loan Balance Payoff	$ 136,657
Net Sale Proceeds Before Tax	$ 147,210

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	$ 147,210
Investor Cash Outlay	$ 48,441
Net Assets	$ 98,769
Average Yield
Annual Net Assets	$ 9,877
Average Cash Flow (After Taxes)	$ 6,124
Average Annual Gain (After Taxes)	$ 16,000
Average Annual Yield (After Taxes)	7.12 %

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: 3410 NE 12th St, Gainesville RENTAL

Property Report :

3410 NE 12th St, Gainesville, FL 32609

Executive Summary