Tipo Studio : 398 NE 5th St , Miami FL 33132

398 NE 5th St , Miami, FL 33132

Condominium: , 1 bathroom

Year built: 2022, Size: 508 SF

Investment strategy: Rental Property

Purchase Price$ 743,000

Rent$ 9,600/mo

Monthly Cash Flow$ 2,035

Cash on Cash Return7.15 %

Financial Analysis

Cash on Cash Return	7.15 %
Internal Rate of Return (IRR)	8.32 %
Capitalization Rate	8.57 %
Gross Rent Multiplier (GRM)	6.45
Debt-coverage Ratio (DCR)	1.62
Operating Expense Ratio (OER)	30.91 %

Financial Breakdown

Purchase Price	$ 743,000
Purchase Costs	$ 44,580
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).	$ 787,580
Financing	$ 445,800
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 341,780
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.	$ 297,200
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.	$ 44,580

Operating Analysis

Rent	$ 9,600/mo
Gross Operating Income (GOI)	$ 92,160
Total Expenses	$ 28,483
Net Operating Income (NOI)	$ 63,677
Annual Debt Service	$ 39,253
Cash Flow Before Taxes (CFBT)	$ 24,423
Income Tax Liability	$ 0
Cash Flow After Taxes (CFAT)	$ 24,423

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.	$ 115,200
	$ 0
	$ 0
Total Gross Income	$ 115,200
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.	$ 23,040
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.	$ 92,160	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	$ 13,824	15.00 %
Insurance	$ 2,160	2.34 %
Servicios de luz	$ 1,440	1.56 %
Property tax	$ 1,843	2.00 %
Comisiones airbnb, expedia	$ 9,216	10.00 %
Total Expenses	$ 28,483	30.91 %
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.	$ 63,677	69.09 %

Cash Flow (Year 1)

Net Operating Income	$ 63,677	69.09 %
Annual Debt Service	$ 39,253	42.59 %
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.	$ 24,423	26.50 %
Income Tax Liability	$ 0	0.00 %
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.	$ 24,423	26.50 %

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).	30.91 %
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.	73.50 %

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.	$ 49,976
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.	8.32 %
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	1.15
Annual Depreciation	$ 21,615

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.	7.15 %
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.	13.67 %
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.	8.57 %
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.	15.50 %
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.	6.45

Financing
Down Payment		$ 297,200
Loan		$ 445,800
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.		60.00 %
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).		60.00 %
Debt Coverage Ratio		1.62

Loan Financing of: Purchase price ($ 743,000)
Type	Amortized
Loan Amount	$ 445,800
Down payment (40%)	$ 297,200
Amortization	30 years
Interest Rate	8.00 %
Monthly Payment	$ 3,271.12

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	115,200	117,504	119,854	122,251	124,696
Vacancy Loss	0	23,040	23,501	23,971	24,450	24,939
Gross Operating Income	0	92,160	94,003	95,883	97,801	99,757
Expenses	0	28,483	29,053	29,634	30,227	30,831
Net Operating Income	0	63,677	64,950	66,249	67,574	68,926
Loan Payment	0	39,253	39,253	39,253	39,253	39,253
Payment Interest Part	0	35,529	35,220	34,886	34,523	34,130
Payment Principal Part	0	3,724	4,033	4,368	4,730	5,123
Cash Flow
Repairs/Construction	0	0	0	0	0	0
Cash Flow Before Taxes	-341,780	24,423	25,697	26,996	28,321	29,672
Depreciation	0	21,615	21,615	21,615	21,615	21,615
Taxes	0	0	0	0	0	0
Cash Flow After Taxes	-341,780	24,423	25,697	26,996	28,321	29,672

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%)	$ 861,341
Cap Rate (8.57%) & NOI	$ 804,268
Gross Rent Multiplier	$ 804,290

Sale Proceeds

Projected Selling Price	$ 861,341
Costs of Sale (10.00%)	$ 86,134
1. Loan Balance Payoff	$ 423,821
Net Sale Proceeds Before Tax	$ 351,385

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	$ 351,385
Investor Cash Outlay	$ 341,780
Net Assets	$ 9,605
Average Yield
Annual Net Assets	$ 1,921
Average Cash Flow (After Taxes)	$ 21,087
Average Annual Gain (After Taxes)	$ 23,008
Average Annual Yield (After Taxes)	3.10 %

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: Tipo Studio RENTAL

Property Report :

Tipo Studio

398 NE 5th St , Miami, FL 33132

Executive Summary

398 NE 5th St , Miami, FL 33132

Financial Analysis

Financial Breakdown

Total Capital Needed

Total Capital Needed

Cash out of Pocket

Cash out of Pocket

Cash at Closing

Cash at Closing

Cash During Rehab

Cash During Rehab

Operating Analysis

Operating Analysis

Annual Property Operating Data

Gross Scheduled Income (GSI)

Gross Scheduled Income (GSI)

Vacancy and Credit Loss

Vacancy and Credit Loss

Gross Operating Income (GOI)

Gross Operating Income (GOI)

Operating Expenses

Operating Expenses

Net Operating Income (NOI)

Net Operating Income (NOI)

Cash Flow (Year 1)

Cash Flow

Cash Flow

Cash Flow

Cash Flow

Operating Ratios

Operating Expense Ratio

Operating Expense Ratio

Break-Even Ratio (BER)

Break-Even Ratio (BER)

Financial Analysis

Financial Measures

Net Present Value (NPV)

Net Present Value (NPV)

Internal Rate of Return (IRR)

Internal Rate of Return (IRR)

Profitability Index

Profitability Index

Investment Return Ratios

Cash on Cash Return

Cash on Cash Return

Return on Investment

Return on Investment

Capitalization Rate

Capitalization Rate

Gross Rental Yield

Gross Rental Yield

Gross Rent Multiplier (GRM)

Gross Rent Multiplier (GRM)

Financing Overview

Loan to Value Ratio

Loan to Value Ratio

Loan to Cost Ratio

Loan to Cost Ratio

Long-term Cash Flow Forecast

Resale Analysis

Resale Price Evaluation Methods

Sale Proceeds

Net Assets and Yield

Photos