4321 Viva Ln, Indianapolis IN 46239

4321 Viva Ln, Indianapolis, IN 46239

Singlefamily: 3 bedrooms , 2 bathrooms

Year built: 2011, Size: 1461 SF

Investment strategy: Rental Property

Purchase Price$ 229,900

Rent$ 1,450/mo

Monthly Cash Flow$ 141

Cash on Cash Return3.67 %

Financial Analysis

Cash on Cash Return	3.67 %
Internal Rate of Return (IRR)	8.79 %
Capitalization Rate	5.32 %
Gross Rent Multiplier (GRM)	13.21
Debt-coverage Ratio (DCR)	1.16
Operating Expense Ratio (OER)	21.93 %

Financial Breakdown

Purchase Price	$ 229,900
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).	$ 229,900
Financing	$ 183,920
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 45,980
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.	$ 45,980
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	$ 1,450/mo
Gross Operating Income (GOI)	$ 15,660
Total Expenses	$ 3,434
Net Operating Income (NOI)	$ 12,226
Annual Debt Service	$ 10,537
Cash Flow Before Taxes (CFBT)	$ 1,689
Income Tax Liability	$ -880
Cash Flow After Taxes (CFAT)	$ 2,569

Super cute 3 bedroom, 2 full bath home has curb appeal from every angle! Open kitchen/dining/great room concept with 9 foot ceilings! New luxury vinyl flooring, Plantation shutters, and fresh neutral interior paint throughout! The kitchen is on trend with staggered cabinetry, solid surface counter tops, beautifully tiled back splash, island, and new stainless steel appliances. Split bedrooms offer privacy for the master suite with walk-in closet. Enjoy the exceptional outdoor living space both on the front porch or the new cedar deck and pergola out back! Backyard has recently been fenced in. Neighborhood offers a community pool and playground plus easy access to shopping and the interstate. New water heater and water softener.

Purchase Price	$ 229,900
Address	4321 Viva Ln , Indianapolis, 46239, IN
MLS^® #	21810463
Listing Agent	Kelley O Connor
Listing Broker	CENTURY 21 Scheetz
Year Built	2011
Type	Singlefamily
Size	1461 SF
Bedrooms	3
Bathrooms	2

Property History

Date	Price	Change	Event
6/20/2016
5/3/2012

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.	$ 17,400
Total Gross Income	$ 17,400
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.	$ 1,740
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.	$ 15,660	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	6.05 %
Association fees	$ 636	4.06 %
Property tax	$ 1,622	10.36 %
Insurance	$ 228	1.46 %
Total Expenses	$ 3,434	21.93 %
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.	$ 12,226	78.07 %

Cash Flow (Year 1)

Net Operating Income	$ 12,226	78.07 %
Annual Debt Service	$ 10,537	67.28 %
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.	$ 1,689	10.79 %
Income Tax Liability	$ -880	-5.62 %
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.	$ 2,569	16.41 %

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).	21.93 %
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.	89.21 %

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.	$ 52,476
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.	8.79 %
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	2.14
Annual Depreciation	$ 6,688

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.	3.67 %
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.	8.67 %
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.	5.32 %
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.	7.57 %
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.	13.21

Financing
Down Payment		$ 45,980
30y		$ 183,920
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		1.16

30y Financing of: Purchase price ($ 229,900)
Type	Amortized
Loan Amount	$ 183,920
Down payment (20%)	$ 45,980
Amortization	30 years
Interest Rate	4.00 %
Monthly Payment	$ 878.06

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	17,400	17,574	17,750	17,927	18,107	18,288	18,470	18,655	18,842	19,030	19,220	19,413	19,607	19,803	20,001	20,201	20,403	20,607	20,813	21,021	21,231	21,444	21,658	21,875	22,093	22,314	22,537	22,763	22,990	23,220
Vacancy Loss	0	1,740	1,757	1,775	1,793	1,811	1,829	1,847	1,866	1,884	1,903	1,922	1,941	1,961	1,980	2,000	2,020	2,040	2,061	2,081	2,102	2,123	2,144	2,166	2,187	2,209	2,231	2,254	2,276	2,299	2,322
Gross Operating Income	0	15,660	15,817	15,975	16,135	16,296	16,459	16,623	16,790	16,958	17,127	17,298	17,471	17,646	17,823	18,001	18,181	18,363	18,546	18,732	18,919	19,108	19,299	19,492	19,687	19,884	20,083	20,284	20,487	20,691	20,898
Expenses	0	3,434	3,503	3,573	3,644	3,717	3,791	3,867	3,945	4,023	4,104	4,186	4,270	4,355	4,442	4,531	4,622	4,714	4,808	4,905	5,003	5,103	5,205	5,309	5,415	5,523	5,634	5,746	5,861	5,979	6,098
Net Operating Income	0	12,226	12,314	12,402	12,490	12,579	12,667	12,756	12,845	12,934	13,023	13,112	13,202	13,291	13,380	13,470	13,559	13,648	13,738	13,827	13,916	14,005	14,095	14,183	14,272	14,361	14,449	14,537	14,625	14,713	14,800
Loan Payment	0	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537	10,537
Payment Interest Part	0	7,298	7,166	7,029	6,886	6,737	6,582	6,421	6,253	6,079	5,897	5,708	5,511	5,307	5,094	4,872	4,641	4,401	4,151	3,891	3,620	3,338	3,045	2,740	2,422	2,091	1,747	1,389	1,016	628	225
Payment Principal Part	0	3,239	3,371	3,508	3,651	3,800	3,955	4,116	4,283	4,458	4,640	4,829	5,025	5,230	5,443	5,665	5,896	6,136	6,386	6,646	6,917	7,199	7,492	7,797	8,115	8,446	8,790	9,148	9,520	9,908	10,312
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	-45,980	1,689	1,777	1,865	1,954	2,042	2,131	2,219	2,308	2,397	2,486	2,576	2,665	2,754	2,844	2,933	3,022	3,112	3,201	3,290	3,380	3,469	3,558	3,647	3,735	3,824	3,912	4,001	4,088	4,176	4,263
Depreciation	0	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688	6,688
Taxes	0	-880	-770	-657	-542	-423	-301	-176	-48	84	219	358	501	648	799	955	1,115	1,280	1,450	1,624	1,804	1,990	2,181	2,378	2,581	2,791	3,007	3,230	3,460	3,698	3,944
Cash Flow After Taxes	-45,980	2,569	2,547	2,523	2,495	2,465	2,432	2,396	2,356	2,314	2,267	2,217	2,164	2,106	2,044	1,978	1,907	1,832	1,752	1,666	1,575	1,479	1,377	1,269	1,154	1,033	905	770	628	478	320

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%)	$ 309,870
Cap Rate (5.32%) & NOI	$ 278,198
Gross Rent Multiplier	$ 306,741

Sale Proceeds

Projected Selling Price	$ 309,870
Costs of Sale (6.00%)	$ 18,592
Net Sale Proceeds Before Tax	$ 291,278

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	$ 291,278
Investor Cash Outlay	$ 45,980
Net Assets	$ 245,298
Average Yield
Annual Net Assets	$ 8,177
Average Cash Flow (After Taxes)	$ 1,757
Average Annual Gain (After Taxes)	$ 9,933
Average Annual Yield (After Taxes)	4.32 %

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: 4321 Viva Ln, Indianapolis RENTAL

Property Report :

4321 Viva Ln, Indianapolis, IN 46239

Executive Summary