35 Edgewater Dr #206, Coral Gables FL 33133

35 Edgewater Dr #206, Coral Gables, FL 33133

Condominium: 1 bedroom , 1 bathroom

Size: 616 SF

Investment strategy: Rental Property

Purchase Price$ 245,000

Rent$ 2,200/mo

Monthly Cash Flow$ 171

Cash on Cash Return4.03 %

Financial Analysis

Cash on Cash Return	4.03 %
Internal Rate of Return (IRR)	13.40 %
Capitalization Rate	6.00 %
Gross Rent Multiplier (GRM)	9.28
Debt-coverage Ratio (DCR)	1.16
Operating Expense Ratio (OER)	40.08 %

Financial Breakdown

Purchase Price	$ 245,000
Purchase Costs	$ 10,165
Repair/Construction Costs	$ 4,000
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 259,165
Financing	$ 208,250
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 50,915
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.	$ 40,915
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.	$ 10,000

Operating Analysis

Rent	$ 2,200/mo
Gross Operating Income (GOI)	$ 24,552
Total Expenses	$ 9,840
Net Operating Income (NOI)	$ 14,712
Annual Debt Service	$ 12,662
Cash Flow Before Taxes (CFBT)	$ 2,050
Income Tax Liability	$ -429
Cash Flow After Taxes (CFAT)	$ 2,479

According to the Coral Gables public records, the property at 35 Edgewater Dr, Coral Gables, FL 33133 has approximately 616 square feet, 1 beds and 1 baths. Nearby schools include Air Base Elementary School, Coconut Grove Elementary School, Ponce De Leon Middle School and Coral Gables Senior High School.

Purchase Price	$ 245,000
Address	35 Edgewater Dr #206 , Coral Gables, 33133, FL
Type	Condominium
Size	616 SF
Bedrooms	1
Bathrooms	1

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.	$ 26,400
Total Gross Income	$ 26,400
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.	$ 1,848
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.	$ 24,552	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).
HOA	$ 5,340	21.75 %
Insurance	$ 1,500	6.11 %
Property tax	$ 3,000	12.22 %
Total Expenses	$ 9,840	40.08 %
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.	$ 14,712	59.92 %

Cash Flow (Year 1)

Net Operating Income	$ 14,712	59.92 %
Annual Debt Service	$ 12,662	51.57 %
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.	$ 2,050	8.35 %
Income Tax Liability	$ -429	-1.75 %
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.	$ 2,479	10.10 %

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).	40.08 %
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.	91.65 %

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.	$ 21,785
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.	13.40 %
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	1.43
Annual Depreciation	$ 7,127

Holding period of 5 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.	4.03 %
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.	18.46 %
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.	6.00 %
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.	10.78 %
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.	9.28

Financing
Down Payment		$ 36,750
LOAN		$ 208,250
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.		85.00 %
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).		83.63 %
Debt Coverage Ratio		1.16

LOAN Financing of: Purchase price ($ 245,000)
Type	Amortized
Loan Amount	$ 208,250
Down payment (15%)	$ 36,750
Amortization	30 years
Interest Rate	4.50 %
Monthly Payment	$ 1,055.17

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
Operational Analysis
Gross Scheduled Income	0	26,400	26,928	27,467	28,016	28,576
Vacancy Loss	0	1,848	1,885	1,923	1,961	2,000
Gross Operating Income	0	24,552	25,043	25,544	26,055	26,576
Expenses	0	9,840	10,037	10,238	10,442	10,651
Net Operating Income	0	14,712	15,006	15,306	15,612	15,925
Loan Payment	0	12,662	12,662	12,662	12,662	12,662
Payment Interest Part	0	9,303	9,148	8,987	8,818	8,641
Payment Principal Part	0	3,360	3,514	3,675	3,844	4,021
Cash Flow
Repairs/Construction	4,000	0	0	0	0	0
Cash Flow Before Taxes	-50,915	2,050	2,344	2,644	2,950	3,263
Depreciation	0	7,127	7,127	7,127	7,127	7,127
Taxes	0	-429	-317	-202	-83	39
Cash Flow After Taxes	-50,915	2,479	2,661	2,846	3,034	3,224

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 5 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 284,022
Cap Rate (6.00%) & NOI	$ 265,412
Gross Rent Multiplier	$ 265,187

Sale Proceeds

Projected Selling Price	$ 284,022
Costs of Sale (6.00%)	$ 17,041
1. Loan Balance Payoff	$ 189,836
Net Sale Proceeds Before Tax	$ 77,144

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	$ 77,144
Investor Cash Outlay	$ 50,915
Net Assets	$ 26,229
Average Yield
Annual Net Assets	$ 5,246
Average Cash Flow (After Taxes)	$ 2,204
Average Annual Gain (After Taxes)	$ 7,450
Average Annual Yield (After Taxes)	3.04 %

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: 35 Edgewater Dr #206, Coral Gables RENTAL

Property Report :

35 Edgewater Dr #206, Coral Gables, FL 33133

Executive Summary