3426 W Ridgewood Dr, Parma OH 44134

3426 W Ridgewood Dr, Parma, OH 44134

Singlefamily: 3 bedrooms , 1 bathroom

Year built: 1952, Size: 1868 SF

Investment strategy: Rental Property

Purchase Price$ 114,900

Rent$ 1,125/mo

Monthly Cash Flow$ 214

Cash on Cash Return11.16 %

Financial Analysis

Cash on Cash Return	11.16 %
Internal Rate of Return (IRR)	11.05 %
Capitalization Rate	6.81 %
Gross Rent Multiplier (GRM)	8.51
Debt-coverage Ratio (DCR)	1.49
Operating Expense Ratio (OER)	35.56 %

Financial Breakdown

Purchase Price	$ 114,900
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).	$ 114,900
Financing	$ 91,920
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 22,980
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.	$ 22,980
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.	$ 0

Operating Analysis

Rent	$ 1,125/mo
Gross Operating Income (GOI)	$ 12,150
Total Expenses	$ 4,320
Net Operating Income (NOI)	$ 7,830
Annual Debt Service	$ 5,266
Cash Flow Before Taxes (CFBT)	$ 2,564
Income Tax Liability	$ 420
Cash Flow After Taxes (CFAT)	$ 2,144

LOCATION, LOCATION, LOCATION! Huge lot with a beautiful backyard, located close to major parks. Interior of the property has lots of potential. Demo already completed and ready for all of your creativity and ideas. Needs some work but, is ready for you to make your own. Investors Welcome. Don't miss this opportunity!

Purchase Price	$ 114,900
Address	3426 W Ridgewood Dr , Parma, 44134, OH
MLS^® #	4294515
Listing Agent	Brandon Moherman
Listing Broker	Geisler Realty, Llc
Year Built	1952
Type	Singlefamily
Size	1868 SF
Bedrooms	3
Bathrooms	1

Property History

Date	Price	Change	Event
11/9/2009
11/29/2005

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.	$ 13,500
Total Gross Income	$ 13,500
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.	$ 1,350
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.	$ 12,150	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	$ 948	7.80 %
Property tax	$ 3,024	24.89 %
Insurance	$ 348	2.86 %
Total Expenses	$ 4,320	35.56 %
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.	$ 7,830	64.44 %

Cash Flow (Year 1)

Net Operating Income	$ 7,830	64.44 %
Annual Debt Service	$ 5,266	43.34 %
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.	$ 2,564	21.10 %
Income Tax Liability	$ 420	3.46 %
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.	$ 2,144	17.65 %

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).	35.56 %
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.	78.90 %

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.	$ 38,211
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.	11.05 %
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	2.66
Annual Depreciation	$ 3,343

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.	11.16 %
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.	16.16 %
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.	6.81 %
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.	11.75 %
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.	8.51

Financing
Down Payment		$ 22,980
30y		$ 91,920
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		1.49

30y Financing of: Purchase price ($ 114,900)
Type	Amortized
Loan Amount	$ 91,920
Down payment (20%)	$ 22,980
Amortization	30 years
Interest Rate	4.00 %
Monthly Payment	$ 438.84

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	13,500	13,635	13,771	13,909	14,048	14,189	14,331	14,474	14,619	14,765	14,912	15,062	15,212	15,364	15,518	15,673	15,830	15,988	16,148	16,309	16,473	16,637	16,804	16,972	17,141	17,313	17,486	17,661	17,837	18,016
Vacancy Loss	0	1,350	1,364	1,377	1,391	1,405	1,419	1,433	1,447	1,462	1,476	1,491	1,506	1,521	1,536	1,552	1,567	1,583	1,599	1,615	1,631	1,647	1,664	1,680	1,697	1,714	1,731	1,749	1,766	1,784	1,802
Gross Operating Income	0	12,150	12,272	12,394	12,518	12,643	12,770	12,897	13,026	13,157	13,288	13,421	13,555	13,691	13,828	13,966	14,106	14,247	14,389	14,533	14,679	14,825	14,974	15,123	15,275	15,427	15,582	15,737	15,895	16,054	16,214
Expenses	0	4,320	4,406	4,495	4,584	4,676	4,770	4,865	4,962	5,062	5,163	5,266	5,371	5,479	5,588	5,700	5,814	5,930	6,049	6,170	6,293	6,419	6,548	6,679	6,812	6,948	7,087	7,229	7,374	7,521	7,672
Net Operating Income	0	7,830	7,865	7,900	7,934	7,967	8,000	8,032	8,064	8,095	8,125	8,155	8,184	8,212	8,239	8,266	8,292	8,316	8,340	8,363	8,385	8,406	8,426	8,445	8,462	8,479	8,494	8,508	8,521	8,532	8,543
Loan Payment	0	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266	5,266
Payment Interest Part	0	3,647	3,581	3,513	3,441	3,367	3,290	3,209	3,125	3,038	2,947	2,853	2,754	2,652	2,546	2,435	2,319	2,199	2,074	1,944	1,809	1,668	1,522	1,369	1,210	1,045	873	694	508	314	112
Payment Principal Part	0	1,619	1,685	1,753	1,825	1,899	1,976	2,057	2,141	2,228	2,319	2,413	2,512	2,614	2,720	2,831	2,947	3,067	3,192	3,322	3,457	3,598	3,744	3,897	4,056	4,221	4,393	4,572	4,758	4,952	5,154
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	-22,980	2,564	2,599	2,634	2,668	2,701	2,734	2,766	2,798	2,829	2,859	2,889	2,918	2,946	2,973	3,000	3,026	3,050	3,074	3,097	3,119	3,140	3,160	3,179	3,196	3,213	3,228	3,242	3,255	3,266	3,277
Depreciation	0	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343	3,343
Taxes	0	420	470	522	575	629	684	740	798	857	918	980	1,043	1,108	1,175	1,244	1,315	1,387	1,461	1,538	1,616	1,697	1,781	1,866	1,954	2,045	2,139	2,236	2,335	2,438	2,544
Cash Flow After Taxes	-22,980	2,144	2,129	2,112	2,093	2,073	2,050	2,026	2,000	1,972	1,942	1,909	1,875	1,838	1,798	1,756	1,711	1,663	1,613	1,559	1,503	1,443	1,379	1,312	1,242	1,167	1,089	1,007	920	829	733

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 (1.00%)	$ 154,868
Cap Rate (6.81%) & NOI	$ 125,442
Gross Rent Multiplier	$ 153,315

Sale Proceeds

Projected Selling Price	$ 154,868
Costs of Sale (6.00%)	$ 9,292
Net Sale Proceeds Before Tax	$ 145,576

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	$ 145,576
Investor Cash Outlay	$ 22,980
Net Assets	$ 122,596
Average Yield
Annual Net Assets	$ 4,087
Average Cash Flow (After Taxes)	$ 1,605
Average Annual Gain (After Taxes)	$ 5,692
Average Annual Yield (After Taxes)	4.95 %

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: 3426 W Ridgewood Dr, Parma RENTAL

Property Report :

3426 W Ridgewood Dr, Parma, OH 44134

Executive Summary