39715 Old Wheatland Rd, Waterford VA 20197

39715 Old Wheatland Rd, Waterford, VA 20197

land:

Investment strategy: Rental Property

Purchase Price$ 2,750,000

Rent$ 17,250/mo

Monthly Cash Flow$ 6,251

Cash on Cash Return12.56 %

Financial Analysis

Cash on Cash Return	12.56 %
Internal Rate of Return (IRR)	19.25 %
Capitalization Rate	8.18 %
Gross Rent Multiplier (GRM)	13.29
Debt-coverage Ratio (DCR)	1.50
Operating Expense Ratio (OER)	31.22 %
After Repair Value	$ 2,750,000

Financial Breakdown

Purchase Price	$ 2,750,000
Purchase Costs	$ 2,000
Repair/Construction Costs	$ 45,000
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 2,797,000
Financing	$ 2,200,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 597,000
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.	$ 550,000
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.	$ 47,000

Operating Analysis

Rent	$ 17,250/mo
Gross Operating Income (GOI)	$ 327,000
Total Expenses	$ 102,093
Net Operating Income (NOI)	$ 224,907
Annual Debt Service	$ 149,896
Cash Flow Before Taxes (CFBT)	$ 75,011
Income Tax Liability	$ 6,162
Cash Flow After Taxes (CFAT)	$ 68,849

Belle View Farm , Boarding facility on 74.11 acres, 1 minute from the Village of Waterford. Historic stone and frame Quaker barn completely renovated. 12 stalls, another 4 stalls adjacent, and 4 more stalls in pony shed. Board fencing, 8 paddocks, 6 run in sheds, water in every field. 3 homes circa 1801, 1959 and 1965 all restored in excellent condition. Property in Conservation Easement. Potential to be 3 lots. NEED 24 HOUR NOTICE TO SHOW

Purchase Price	$ 2,750,000
Address	39715 Old Wheatland Rd , Waterford, 20197, VA
MLS^® #	VALO2025920
Listing Agent	Paul Mac Mahon
Listing Broker	SHERIDAN-MACMAHON
Type	land

39715 Old Wheatland Rd Waterford, VA 20197

$ 17,250

Rent
land

Bldg type

Your rent may be too high.

Average

$ 1,722

Median

$ 1,749

25th %

$ 1,559

75th %

$ 1,885

Property address	Similarity	Distance	Beds	Baths	SqFt	Date Listed	Bldg type	Rent
14897 Clover Hill Rd	74%	3.0mi	1	1	0	3/6/2022	Single Family	$ 995
16302 Clarkes Gap Rd	73%	3.1mi	2	2	865	3/31/2022	Single Family	$ 1,800
40815 Hannah Dr	73%	3.1mi	5	4.5	5,009	4/5/2022	Single Family	$ 5,750
14664 Creek Ln	72%	3.6mi	4	2	3,000	12/20/2021	Single Family	$ 2,795
17471 Brownsville Ln	62%	6.1mi	5	4.5	4,611	5/8/2022	Single Family	$ 4,800

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.	$ 207,000
Boarding	$ 120,000
Total Gross Income	$ 327,000
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.	$ 0
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.	$ 327,000	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).
Utilities	$ 14,400	4.40 %
Insurance	$ 1,000	0.31 %
Repairs	$ 6,000	1.83 %
Property tax	$ 9,000	2.75 %
Insurance	$ 10,308	3.15 %
TOT	$ 11,385	3.48 %
Property Manager	$ 50,000	15.29 %
Total Expenses	$ 102,093	31.22 %
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.	$ 224,907	68.78 %

Cash Flow (Year 1)

Net Operating Income	$ 224,907	68.78 %
Annual Debt Service	$ 149,896	45.84 %
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.	$ 75,011	22.94 %
Income Tax Liability	$ 6,162	1.88 %
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.	$ 68,849	21.05 %

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).	31.22 %
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.	77.06 %

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.	$ 989,686
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.	19.25 %
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	$ 80,000

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.	12.56 %
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.	26.38 %
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.	8.18 %
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.	7.53 %
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.	13.29

Financing		% of ARV
Down Payment	$ 550,000	20.00 %
Loan	$ 2,200,000	80.00 %
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).		78.71 %
Debt Coverage Ratio		1.50

Loan Financing of: Purchase price ($ 2,750,000)
Type	Amortized
Loan Amount	$ 2,200,000
Down payment (20%)	$ 550,000
Amortization	30 years
Interest Rate	5.50 %
Monthly Payment	$ 12,491.36

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	327,000	331,140	335,363	339,670	344,063	348,545	353,116	357,778	362,533	367,384
Vacancy Loss	0	0	0	0	0	0	0	0	0	0	0
Gross Operating Income	0	327,000	331,140	335,363	339,670	344,063	348,545	353,116	357,778	362,533	367,384
Expenses	0	102,093	104,135	106,218	108,342	110,509	112,719	114,973	117,273	119,618	122,011
Net Operating Income	0	224,907	227,005	229,145	231,328	233,555	235,826	238,142	240,505	242,915	245,374
Loan Payment	0	149,896	149,896	149,896	149,896	149,896	149,896	149,896	149,896	149,896	149,896
Payment Interest Part	0	120,260	118,589	116,823	114,957	112,986	110,904	108,705	106,381	103,927	101,333
Payment Principal Part	0	29,636	31,308	33,074	34,939	36,910	38,992	41,192	43,515	45,970	48,563
Cash Flow
Repairs/Construction	45,000	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-597,000	75,011	77,109	79,249	81,432	83,658	85,930	88,246	90,609	93,019	95,477
Depreciation	0	80,000	80,000	80,000	80,000	80,000	80,000	80,000	80,000	80,000	80,000
Taxes	0	6,162	7,104	8,081	9,093	10,142	11,230	12,359	13,531	14,747	16,010
Cash Flow After Taxes	-597,000	68,849	70,005	71,168	72,339	73,516	74,699	75,887	77,078	78,272	79,467

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%)	$ 3,695,770
Cap Rate (8.18%) & NOI	$ 2,999,677
Gross Rent Multiplier	$ 4,882,535

Sale Proceeds

Projected Selling Price	$ 3,695,770
Costs of Sale (6.00%)	$ 221,746
1. Loan Balance Payoff	$ 1,815,902
Net Sale Proceeds Before Tax	$ 1,658,122

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	$ 1,658,122
Investor Cash Outlay	$ 597,000
Net Assets	$ 1,061,122
Average Yield
Annual Net Assets	$ 106,112
Average Cash Flow (After Taxes)	$ 66,181
Average Annual Gain (After Taxes)	$ 172,293
Average Annual Yield (After Taxes)	6.27 %

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: 39715 Old Wheatland Rd, Waterford RENTAL

Property Report :

39715 Old Wheatland Rd, Waterford, VA 20197

Executive Summary