4602 SV Dr - Current Income + 5% app: 4602 Scotts Valley Dr, Scotts Valley CA 95066 | Zilculator: Real Estate Analysis & Marketing

4602 Scotts Valley Dr, Scotts Valley, CA 95066

Multifamily: 14 bedrooms

Year built: 1981, Size: 5364 SF

Investment strategy: Rental Property

Purchase Price$ 2,700,000

Rent$ 16,917/mo

Monthly Cash Flow$ 3,263

Cash on Cash Return3.22 %

Financial Analysis

Cash on Cash Return	3.22 %
Internal Rate of Return (IRR)	13.33 %
Capitalization Rate	4.83 %
Gross Rent Multiplier (GRM)	13.30
Debt-coverage Ratio (DCR)	1.43
Operating Expense Ratio (OER)	33.72 %

Financial Breakdown

Purchase Price	$ 2,700,000
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).	$ 2,700,000
Financing	$ 1,485,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 1,215,000
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.	$ 1,215,000
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.	$ 0

Operating Analysis

Rent	$ 16,917/mo
Gross Operating Income (GOI)	$ 196,914
Total Expenses	$ 66,400
Net Operating Income (NOI)	$ 130,514
Annual Debt Service	$ 91,353
Cash Flow Before Taxes (CFBT)	$ 39,161
Income Tax Liability	$ -3,962
Cash Flow After Taxes (CFAT)	$ 43,123

Extremely rare investment opportunity to own an outstanding multi-res property in fantastic core Scotts Valley location. Scotts Valley known for best schools in county, ideal for commuters to Silicon Valley and Santa Cruz County, fun small town USA. Right on Scotts Valley Dr so convenient to all of town. The property is over 1/2Ac- 24, 263 sq ft, providing upside/value add through increasing density or other development options. Go in 4.67% Cap Rate w/over $3500/mo loss to lease w some legacy tenants is a short term option to improve yield. All units set back from street. Rear of property has nice creek setting. Current configuration provides over 20 parking spaces. 4 of 6 units have been updated. New roof in 2017 Easy to own solid investment property now one to hold and enjoy long term.

Purchase Price	$ 2,700,000
Address	4602 Scotts Valley Dr , Scotts Valley, 95066, CA
MLS^® #	ML81898741
Listing Agent	Andy Kay
Listing Broker	eXp Realty of California Inc.
Year Built	1981
Type	Multifamily
Number of Units
Size	5364 SF
Bedrooms	14

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.	$ 203,004
Total Gross Income	$ 203,004
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.	$ 6,090
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.	$ 196,914	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	$ 9,550	4.85 %
Utilities	$ 13,550	6.88 %
Insurance	$ 3,000	1.52 %
Repairs	$ 4,000	2.03 %
Property tax	$ 35,100	17.83 %
Landscaping	$ 1,200	0.61 %
Total Expenses	$ 66,400	33.72 %
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.	$ 130,514	66.28 %

Cash Flow (Year 1)

Net Operating Income	$ 130,514	66.28 %
Annual Debt Service	$ 91,353	46.39 %
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.	$ 39,161	19.89 %
Income Tax Liability	$ -3,962	-2.01 %
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.	$ 43,123	21.90 %

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).	33.72 %
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.	80.11 %

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.	$ 1,173,588
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.	13.33 %
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	1.97
Annual Depreciation	$ 78,545

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.	3.22 %
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.	14.33 %
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.	4.83 %
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.	7.52 %
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.	13.30

Financing
Down Payment		$ 1,215,000
Loan		$ 1,485,000
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.		55.00 %
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).		55.00 %
Debt Coverage Ratio		1.43

Loan Financing of: Purchase price ($ 2,700,000)
Type	Amortized
Loan Amount	$ 1,485,000
Down payment (45%)	$ 1,215,000
Amortization	30 years
Interest Rate	4.60 %
Monthly Payment	$ 7,612.77

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	203,004	213,154	223,812	235,003	246,753	259,090	272,045	285,647	299,929	314,926
Vacancy Loss	0	6,090	6,395	6,714	7,050	7,403	7,773	8,161	8,569	8,998	9,448
Gross Operating Income	0	196,914	206,760	217,098	227,952	239,350	251,318	263,883	277,078	290,931	305,478
Expenses	0	66,400	67,728	69,083	70,464	71,873	73,311	74,777	76,273	77,798	79,354
Net Operating Income	0	130,514	139,032	148,015	157,488	167,477	178,007	189,106	200,805	213,133	226,124
Loan Payment	0	91,353	91,353	91,353	91,353	91,353	91,353	91,353	91,353	91,353	91,353
Payment Interest Part	0	67,818	66,712	65,554	64,342	63,073	61,745	60,354	58,897	57,372	55,776
Payment Principal Part	0	23,535	24,641	25,799	27,011	28,280	29,609	31,000	32,456	33,981	35,577
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-1,215,000	39,161	47,678	56,662	66,135	76,123	86,653	97,753	109,452	121,780	134,771
Depreciation	0	78,545	78,545	78,545	78,545	78,545	78,545	78,545	78,545	78,545	78,545
Taxes	0	-3,962	-1,556	979	3,650	6,465	9,429	12,552	15,841	19,304	22,951
Cash Flow After Taxes	-1,215,000	43,123	49,235	55,683	62,485	69,659	77,224	85,201	93,611	102,476	111,820

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 (5.00%)	$ 4,398,016
Cap Rate (4.83%) & NOI	$ 4,681,655
Gross Rent Multiplier	$ 4,188,514

Sale Proceeds

Projected Selling Price	$ 4,398,016
Costs of Sale (5.00%)	$ 219,901
1. Loan Balance Payoff	$ 1,193,112
Net Sale Proceeds Before Tax	$ 2,985,004

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	$ 2,985,004
Investor Cash Outlay	$ 1,215,000
Net Assets	$ 1,770,004
Average Yield
Annual Net Assets	$ 177,000
Average Cash Flow (After Taxes)	$ 63,870
Average Annual Gain (After Taxes)	$ 240,870
Average Annual Yield (After Taxes)	8.92 %

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: 4602 SV Dr - Current Income + 5% app RENTAL

Property Report :

4602 SV Dr - Current Income + 5% app

4602 Scotts Valley Dr, Scotts Valley, CA 95066

Executive Summary

4602 Scotts Valley Dr, Scotts Valley, CA 95066

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

Property Description

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