4211 Yorkshire Ave, Parma OH 44134

4211 Yorkshire Ave, Parma, OH 44134

Singlefamily: 3 bedrooms , 1.5 bathrooms

Year built: 1949, Size: 1386 SF

Investment strategy: Rental Property

Purchase Price$ 142,500

Rent$ 1,200/mo

Monthly Cash Flow$ 228

Cash on Cash Return9.59 %

Financial Analysis

Cash on Cash Return	9.59 %
Internal Rate of Return (IRR)	10.65 %
Capitalization Rate	6.50 %
Gross Rent Multiplier (GRM)	9.90
Debt-coverage Ratio (DCR)	1.42
Operating Expense Ratio (OER)	28.52 %

Financial Breakdown

Purchase Price	$ 142,500
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).	$ 142,500
Financing	$ 114,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 28,500
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.	$ 28,500
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	$ 1,200/mo
Gross Operating Income (GOI)	$ 12,960
Total Expenses	$ 3,696
Net Operating Income (NOI)	$ 9,264
Annual Debt Service	$ 6,531
Cash Flow Before Taxes (CFBT)	$ 2,733
Income Tax Liability	$ 298
Cash Flow After Taxes (CFAT)	$ 2,435

Charming 3 bedroom, 1.5 bath cape/bungalow with 2 car garage with newer openers. Many updates include: New Roof 2019, New A/C 2018, New Furnace 2016, Bathrooms updated 2014. Main bath updates also include new bathtub and bath enclosure 2020. The 2nd floor master bedroom has built-in drawers, 2 large closets, and a convenient half bath. The living room has a decorative fireplace & built in bookcase. There is a large foyer entry from the front door. The windows throughout the home are newer and there are glass block windows in the basement. The eat-in kitchen has updated cabinets & appliances are included. There are new storm doors on both the front and the side doors. Enjoy relaxing on the front porch. The home has been freshly painted and is move-in ready! Located close to shopping, library, medical facilities and freeways. This is a great place to call home!

Purchase Price	$ 142,500
Address	4211 Yorkshire Ave , Parma, 44134, OH
MLS^® #	4295852
Listing Agent	Laura Chahulski
Listing Broker	Howard Hanna - North Royalton
Year Built	1949
Type	Singlefamily
Size	1386 SF
Bedrooms	3
Bathrooms	1.5

Property History

Date	Price	Change	Event
9/23/2013
10/17/2009
9/14/2006
5/11/2001

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.	$ 14,400
Total Gross Income	$ 14,400
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.	$ 1,440
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.	$ 12,960	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	7.31 %
Property tax	$ 2,316	17.87 %
Insurance	$ 432	3.33 %
Total Expenses	$ 3,696	28.52 %
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.	$ 9,264	71.48 %

Cash Flow (Year 1)

Net Operating Income	$ 9,264	71.48 %
Annual Debt Service	$ 6,531	50.39 %
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.	$ 2,733	21.09 %
Income Tax Liability	$ 298	2.30 %
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.	$ 2,435	18.79 %

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).	28.52 %
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.	78.91 %

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.	$ 45,332
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.	10.65 %
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	2.59
Annual Depreciation	$ 4,145

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.	9.59 %
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.	14.59 %
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.	6.50 %
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.	10.11 %
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.	9.90

Financing
Down Payment		$ 28,500
30y		$ 114,000
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		1.42

30y Financing of: Purchase price ($ 142,500)
Type	Amortized
Loan Amount	$ 114,000
Down payment (20%)	$ 28,500
Amortization	30 years
Interest Rate	4.00 %
Monthly Payment	$ 544.25

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	14,400	14,544	14,689	14,836	14,985	15,135	15,286	15,439	15,593	15,749	15,907	16,066	16,226	16,389	16,552	16,718	16,885	17,054	17,225	17,397	17,571	17,746	17,924	18,103	18,284	18,467	18,652	18,838	19,027	19,217
Vacancy Loss	0	1,440	1,454	1,469	1,484	1,498	1,513	1,529	1,544	1,559	1,575	1,591	1,607	1,623	1,639	1,655	1,672	1,689	1,705	1,722	1,740	1,757	1,775	1,792	1,810	1,828	1,847	1,865	1,884	1,903	1,922
Gross Operating Income	0	12,960	13,090	13,221	13,353	13,486	13,621	13,757	13,895	14,034	14,174	14,316	14,459	14,604	14,750	14,897	15,046	15,197	15,349	15,502	15,657	15,814	15,972	16,132	16,293	16,456	16,620	16,787	16,954	17,124	17,295
Expenses	0	3,696	3,770	3,845	3,922	4,001	4,081	4,162	4,246	4,330	4,417	4,505	4,596	4,687	4,781	4,877	4,974	5,074	5,175	5,279	5,384	5,492	5,602	5,714	5,828	5,945	6,064	6,185	6,309	6,435	6,564
Net Operating Income	0	9,264	9,320	9,375	9,430	9,486	9,540	9,595	9,649	9,703	9,757	9,811	9,864	9,916	9,969	10,020	10,072	10,123	10,173	10,223	10,273	10,322	10,370	10,418	10,465	10,511	10,557	10,602	10,646	10,689	10,732
Loan Payment	0	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531	6,531
Payment Interest Part	0	4,523	4,442	4,357	4,268	4,176	4,080	3,980	3,876	3,768	3,655	3,538	3,416	3,289	3,157	3,020	2,877	2,728	2,573	2,412	2,244	2,069	1,887	1,698	1,501	1,296	1,083	861	630	390	139
Payment Principal Part	0	2,008	2,089	2,174	2,263	2,355	2,451	2,551	2,655	2,763	2,876	2,993	3,115	3,242	3,374	3,511	3,654	3,803	3,958	4,120	4,287	4,462	4,644	4,833	5,030	5,235	5,448	5,670	5,901	6,141	6,392
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	-28,500	2,733	2,789	2,844	2,899	2,955	3,009	3,064	3,118	3,172	3,226	3,279	3,333	3,385	3,437	3,489	3,541	3,592	3,642	3,692	3,742	3,791	3,839	3,887	3,934	3,980	4,026	4,071	4,115	4,158	4,201
Depreciation	0	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145	4,145
Taxes	0	298	367	437	509	582	658	735	814	895	978	1,064	1,151	1,241	1,333	1,428	1,525	1,625	1,728	1,833	1,942	2,054	2,169	2,287	2,409	2,535	2,664	2,798	2,935	3,077	3,224
Cash Flow After Taxes	-28,500	2,435	2,422	2,407	2,391	2,372	2,352	2,329	2,304	2,277	2,248	2,216	2,181	2,144	2,104	2,062	2,016	1,967	1,915	1,859	1,800	1,737	1,670	1,599	1,524	1,445	1,361	1,273	1,179	1,081	977

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%)	$ 192,068
Cap Rate (6.50%) & NOI	$ 165,102
Gross Rent Multiplier	$ 190,247

Sale Proceeds

Projected Selling Price	$ 192,068
Costs of Sale (6.00%)	$ 11,524
Net Sale Proceeds Before Tax	$ 180,544

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	$ 180,544
Investor Cash Outlay	$ 28,500
Net Assets	$ 152,044
Average Yield
Annual Net Assets	$ 5,068
Average Cash Flow (After Taxes)	$ 1,889
Average Annual Gain (After Taxes)	$ 6,957
Average Annual Yield (After Taxes)	4.88 %

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: 4211 Yorkshire Ave, Parma RENTAL

Property Report :

4211 Yorkshire Ave, Parma, OH 44134

Executive Summary