4221 W Spruce St, Tampa FL 33607

4221 W Spruce St, Tampa, FL 33607

Multifamily: 1 bedroom , 1 bathroom

Year built: 2001, Size: 700 SF

Investment strategy: Rental Property

Purchase Price$ 120,000

Rent$ 1,300/mo

Monthly Cash Flow$ 112

Cash on Cash Return2.77 %

Financial Analysis

Cash on Cash Return	2.77 %
Internal Rate of Return (IRR)	5.19 %
Capitalization Rate	6.16 %
Gross Rent Multiplier (GRM)	7.69
Debt-coverage Ratio (DCR)	1.22
Operating Expense Ratio (OER)	50.12 %

Financial Breakdown

Purchase Price	$ 120,000
Purchase Costs	$ 5,675
Repair/Construction Costs	$ 7,000
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 132,675
Financing	$ 84,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 48,675
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.	$ 37,680
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.	$ 10,995

Operating Analysis

Rent	$ 1,300/mo
Gross Operating Income (GOI)	$ 14,820
Total Expenses	$ 7,428
Net Operating Income (NOI)	$ 7,392
Annual Debt Service	$ 6,043
Cash Flow Before Taxes (CFBT)	$ 1,349
Income Tax Liability	$ -278
Cash Flow After Taxes (CFAT)	$ 1,626

Luxury Condo centrally located across from the International Plaza, near the Westshore Business district, T.I.A., Tampa Stadium, Legend's Field and H.C.C.

Highlights:
- Reserved Covered Parking
- Controlled Access Building
- Full Size Washer/Dryer
- Swimming Pool
- Fitness Center
- Plentiful of Kitchen Cabinet & Counter Space
- Oversized Garden Tub

Purchase Price	$ 120,000
Address	4221 W Spruce St , Tampa, 33607, FL
Year Built	2001
Type	Multifamily
Number of Units
Size	700 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.	$ 15,600
Total Gross Income	$ 15,600
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.	$ 780
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.	$ 14,820	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 Software	$ 564	3.81 %
Home shield	$ 300	2.02 %
Insurance	$ 564	3.81 %
Repairs	$ 600	4.05 %
Property tax	$ 1,932	13.04 %
HOA	$ 3,468	23.40 %
Total Expenses	$ 7,428	50.12 %
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.	$ 7,392	49.88 %

Cash Flow (Year 1)

Net Operating Income	$ 7,392	49.88 %
Annual Debt Service	$ 6,043	40.78 %
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.	$ 1,349	9.10 %
Income Tax Liability	$ -278	-1.87 %
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.	$ 1,626	10.97 %

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).	50.12 %
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.	90.90 %

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.	$ 372
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.	5.19 %
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	1.01
Annual Depreciation	$ 3,491

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.	2.77 %
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.	10.17 %
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.	6.16 %
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.	13.00 %
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.	7.69

Financing
Down Payment		$ 36,000
Loan		$ 84,000
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.		70.00 %
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).		66.14 %
Debt Coverage Ratio		1.22

Loan Financing of: Purchase price ($ 120,000)
Type	Amortized
Loan Amount	$ 84,000
Down payment (30%)	$ 36,000
Amortization	30 years
Interest Rate	6.00 %
Monthly Payment	$ 503.62

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	15,600	15,912	16,230	16,555	16,886
Vacancy Loss	0	780	796	812	828	844
Gross Operating Income	0	14,820	15,116	15,419	15,727	16,042
Expenses	0	7,428	7,577	7,728	7,883	8,040
Net Operating Income	0	7,392	7,540	7,691	7,844	8,001
Loan Payment	0	6,043	6,043	6,043	6,043	6,043
Payment Interest Part	0	5,012	4,948	4,881	4,809	4,733
Payment Principal Part	0	1,032	1,095	1,163	1,234	1,311
Cash Flow
Repairs/Construction	7,000	0	0	0	0	0
Cash Flow Before Taxes	-48,675	1,349	1,496	1,647	1,801	1,958
Depreciation	0	3,491	3,491	3,491	3,491	3,491
Taxes	0	-278	-225	-170	-114	-56
Cash Flow After Taxes	-48,675	1,626	1,721	1,817	1,915	2,014

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%)	$ 139,113
Cap Rate (6.16%) & NOI	$ 129,892
Gross Rent Multiplier	$ 129,853

Sale Proceeds

Projected Selling Price	$ 139,113
Costs of Sale (6.00%)	$ 8,347
1. Loan Balance Payoff	$ 78,166
Net Sale Proceeds Before Tax	$ 52,601

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	$ 52,601
Investor Cash Outlay	$ 48,675
Net Assets	$ 3,926
Average Yield
Annual Net Assets	$ 785
Average Cash Flow (After Taxes)	$ 1,416
Average Annual Gain (After Taxes)	$ 2,201
Average Annual Yield (After Taxes)	1.83 %

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: 4221 W Spruce St, Tampa RENTAL

Property Report :

4221 W Spruce St, Tampa, FL 33607

Executive Summary