3753 Grosvenor Rd, South Euclid OH 44118

3753 Grosvenor Rd, South Euclid, OH 44118

Singlefamily: 4 bedrooms , 1.5 bathrooms

Year built: 1928, Size: 1773 SF

Investment strategy: Rental Property

Purchase Price$ 89,900

Rent$ 1,600/mo

Monthly Cash Flow$ 1,131

Cash on Cash Return75.49 %

Financial Analysis

Cash on Cash Return	75.49 %
Internal Rate of Return (IRR)	45.65 %
Capitalization Rate	15.10 %
Gross Rent Multiplier (GRM)	4.68
Debt-coverage Ratio (DCR)	0.00
Operating Expense Ratio (OER)	21.45 %

Financial Breakdown

Purchase Price	$ 89,900
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).	$ 89,900
Financing	$ 71,920
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 17,980
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.	$ 17,980
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	$ 1,600/mo
Gross Operating Income (GOI)	$ 17,280
Total Expenses	$ 3,706
Net Operating Income (NOI)	$ 13,574
Annual Debt Service	$ 0
Cash Flow Before Taxes (CFBT)	$ 13,574
Income Tax Liability	$ 5,480
Cash Flow After Taxes (CFAT)	$ 8,095

Investment Opportunity in this South Euclid Colonial with 4 bedrooms 1.5 bathrooms and 1, 773 square feet of living space. There is a large living room and dining room with a family room addition on the first floor. There is a large unfinished basement and a two car detached garage. This home has a newer roof and vinyl windows. This home does need repairs and buyer will be required to assume the South Euclid point of sale violations. The seller makes no representations or warranties about the condition of this home and it is to be sold in as is condition.

Purchase Price	$ 89,900
Address	3753 Grosvenor Rd , South Euclid, 44118, OH
MLS^® #	4305187
Listing Agent	Gregory J Strnisa
Listing Broker	Platinum Real Estate
Year Built	1928
Type	Singlefamily
Size	1773 SF
Bedrooms	4
Bathrooms	1.5

Property History

Date	Price	Change	Event
9/1/1975

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.	$ 19,200
Total Gross Income	$ 19,200
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.	$ 1,920
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.	$ 17,280	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	5.49 %
Property tax	$ 2,494	14.43 %
Insurance	$ 264	1.53 %
Total Expenses	$ 3,706	21.45 %
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.	$ 13,574	78.55 %

Cash Flow (Year 1)

Net Operating Income	$ 13,574	78.55 %
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.	$ 13,574	78.55 %
Income Tax Liability	$ 5,480	31.71 %
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.	$ 8,095	46.84 %

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).	21.45 %
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.	21.45 %

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.	$ 124,591
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.	45.65 %
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	7.93
Annual Depreciation	$ 2,615

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.	75.49 %
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.	80.49 %
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.	15.10 %
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.	21.36 %
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.	4.68

Financing
Down Payment		$ 17,980
30y		$ 71,920
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		0.00

30y Financing of: Purchase price ($ 89,900)
Type	Amortized
Loan Amount	$ 71,920
Down payment (20%)	$ 17,980
Amortization	30 years
Interest Rate	0.00 %
Monthly Payment	$ 0.00

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	19,200	19,392	19,586	19,782	19,980	20,179	20,381	20,585	20,791	20,999	21,209	21,421	21,635	21,851	22,070	22,291	22,514	22,739	22,966	23,196	23,428	23,662	23,899	24,138	24,379	24,623	24,869	25,118	25,369	25,623
Vacancy Loss	0	1,920	1,939	1,959	1,978	1,998	2,018	2,038	2,059	2,079	2,100	2,121	2,142	2,164	2,185	2,207	2,229	2,251	2,274	2,297	2,320	2,343	2,366	2,390	2,414	2,438	2,462	2,487	2,512	2,537	2,562
Gross Operating Income	0	17,280	17,453	17,627	17,804	17,982	18,161	18,343	18,527	18,712	18,899	19,088	19,279	19,472	19,666	19,863	20,062	20,262	20,465	20,669	20,876	21,085	21,296	21,509	21,724	21,941	22,160	22,382	22,606	22,832	23,060
Expenses	0	3,706	3,780	3,856	3,933	4,011	4,092	4,174	4,257	4,342	4,429	4,518	4,608	4,700	4,794	4,890	4,988	5,088	5,189	5,293	5,399	5,507	5,617	5,729	5,844	5,961	6,080	6,202	6,326	6,452	6,581
Net Operating Income	0	13,574	13,673	13,772	13,871	13,970	14,070	14,170	14,269	14,370	14,470	14,570	14,671	14,771	14,872	14,973	15,074	15,175	15,276	15,376	15,477	15,578	15,679	15,779	15,880	15,980	16,080	16,180	16,280	16,380	16,479
Loan Payment	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
Payment Interest Part	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
Payment Principal Part	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	71,920
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	-17,980	13,574	13,673	13,772	13,871	13,970	14,070	14,170	14,269	14,370	14,470	14,570	14,671	14,771	14,872	14,973	15,074	15,175	15,276	15,376	15,477	15,578	15,679	15,779	15,880	15,980	16,080	16,180	16,280	16,380	16,479
Depreciation	0	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615	2,615
Taxes	0	5,480	5,529	5,578	5,628	5,678	5,727	5,777	5,827	5,877	5,927	5,978	6,028	6,078	6,129	6,179	6,229	6,280	6,330	6,381	6,431	6,481	6,532	6,582	6,632	6,683	6,733	6,783	6,833	6,882	6,932
Cash Flow After Taxes	-17,980	8,095	8,144	8,193	8,243	8,293	8,342	8,392	8,442	8,492	8,542	8,593	8,643	8,693	8,744	8,794	8,844	8,895	8,945	8,996	9,046	9,096	9,147	9,197	9,247	9,298	9,348	9,398	9,448	9,497	9,547

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%)	$ 121,172
Cap Rate (15.10%) & NOI	$ 109,132
Gross Rent Multiplier	$ 119,913

Sale Proceeds

Projected Selling Price	$ 121,172
Costs of Sale (6.00%)	$ 7,270
1. Loan Balance Payoff	$ 71,920
Net Sale Proceeds Before Tax	$ 41,982

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	$ 41,982
Investor Cash Outlay	$ 17,980
Net Assets	$ 24,002
Average Yield
Annual Net Assets	$ 800
Average Cash Flow (After Taxes)	$ 8,502
Average Annual Gain (After Taxes)	$ 9,302
Average Annual Yield (After Taxes)	10.35 %

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: 3753 Grosvenor Rd, South Euclid RENTAL

Property Report :

3753 Grosvenor Rd, South Euclid, OH 44118

Executive Summary