4801 S Shrank Dr, Independence MO 64055

4801 S Shrank Dr, Independence, MO 64055

Multifamily: 4 bedrooms , 4 bathrooms

Year built: 1981, Size: 1312 SF

Investment strategy: Rental Property

Purchase Price$ 250,000

Rent$ 1,675/mo

Monthly Cash Flow$ 31

Cash on Cash Return3.26 %

Financial Analysis

Cash on Cash Return	3.26 %
Internal Rate of Return (IRR)	22.34 %
Capitalization Rate	6.72 %
Gross Rent Multiplier (GRM)	12.44
Debt-coverage Ratio (DCR)	1.02
Operating Expense Ratio (OER)	15.53 %

Financial Breakdown

Purchase Price	$ 250,000
Purchase Costs	$ 2,600
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).	$ 252,600
Financing	$ 241,250
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 11,350
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.	$ 8,750
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.	$ 2,600

Operating Analysis

Rent	$ 1,675/mo
Gross Operating Income (GOI)	$ 19,899
Total Expenses	$ 3,091
Net Operating Income (NOI)	$ 16,808
Annual Debt Service	$ 16,437
Cash Flow Before Taxes (CFBT)	$ 371
Income Tax Liability	$ -913
Cash Flow After Taxes (CFAT)	$ 1,284

Both sides currently rented, south side has been completley updated, no Seller's Disclosure

Purchase Price	$ 250,000
Address	4801 S Shrank Dr , Independence, 64055, MO
MLS^® #	2389681
Listing Agent	Judy Engle
Listing Broker	RE/MAX Elite, REALTORS
Year Built	1981
Type	Multifamily
Number of Units	2
Size	1312 SF
Bedrooms	4
Bathrooms	4

Unit	Rent
4801	$ 825/mo
4803	$ 850/mo
	$ 0/mo

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.	$ 20,100
Total Gross Income	$ 20,100
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.	$ 201
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.	$ 19,899	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).
Insurance	$ 1,800	9.05 %
Property tax	$ 1,291	6.49 %
Total Expenses	$ 3,091	15.53 %
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.	$ 16,808	84.47 %

Cash Flow (Year 1)

Net Operating Income	$ 16,808	84.47 %
Annual Debt Service	$ 16,437	82.60 %
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.	$ 371	1.86 %
Income Tax Liability	$ -913	-4.59 %
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.	$ 1,284	6.45 %

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).	15.53 %
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.	98.14 %

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.	$ 177,768
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.	22.34 %
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	16.66
Annual Depreciation	$ 7,273

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.	3.26 %
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.	69.34 %
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.	6.72 %
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.	8.04 %
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.	12.44

Financing
Down Payment		$ 8,750
Loan		$ 241,250
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.		96.50 %
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).		96.50 %
Debt Coverage Ratio		1.02

Loan Financing of: Purchase price ($ 250,000)
Type	Amortized
Loan Amount	$ 241,250
Down payment (4%)	$ 8,750
Amortization	30 years
Interest Rate	5.50 %
Monthly Payment	$ 1,369.79

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	20,100	20,502	20,912	21,330	21,757	22,192	22,636	23,089	23,550	24,021	24,502	24,992	25,492	26,002	26,522	27,052	27,593	28,145	28,708	29,282	29,868	30,465	31,074	31,696	32,330	32,976	33,636	34,308	34,995	35,694
Vacancy Loss	0	201	205	209	213	218	222	226	231	236	240	245	250	255	260	265	271	276	281	287	293	299	305	311	317	323	330	336	343	350	357
Gross Operating Income	0	19,899	20,297	20,703	21,117	21,539	21,970	22,410	22,858	23,315	23,781	24,257	24,742	25,237	25,741	26,256	26,781	27,317	27,863	28,421	28,989	29,569	30,160	30,763	31,379	32,006	32,646	33,299	33,965	34,645	35,338
Expenses	0	3,091	3,153	3,216	3,280	3,346	3,413	3,481	3,551	3,622	3,694	3,768	3,843	3,920	3,999	4,079	4,160	4,243	4,328	4,415	4,503	4,593	4,685	4,779	4,874	4,972	5,071	5,173	5,276	5,381	5,489
Net Operating Income	0	16,808	17,144	17,487	17,837	18,194	18,557	18,929	19,307	19,693	20,087	20,489	20,899	21,317	21,743	22,178	22,621	23,074	23,535	24,006	24,486	24,976	25,475	25,985	26,505	27,035	27,575	28,127	28,689	29,263	29,848
Loan Payment	0	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437	16,437
Payment Interest Part	0	13,188	13,004	12,811	12,606	12,390	12,162	11,920	11,666	11,396	11,112	10,812	10,494	10,159	9,805	9,431	9,036	8,618	8,177	7,711	7,219	6,699	6,150	5,569	4,956	4,309	3,624	2,902	2,138	1,332	479
Payment Principal Part	0	3,250	3,433	3,627	3,831	4,048	4,276	4,517	4,772	5,041	5,325	5,626	5,943	6,278	6,632	7,007	7,402	7,819	8,260	8,726	9,219	9,739	10,288	10,868	11,481	12,129	12,813	13,536	14,299	15,106	15,958
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	-11,350	371	707	1,050	1,399	1,756	2,120	2,491	2,870	3,256	3,650	4,051	4,461	4,879	5,305	5,740	6,184	6,636	7,098	7,568	8,049	8,538	9,038	9,547	10,067	10,597	11,138	11,689	12,252	12,826	13,411
Depreciation	0	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273	7,273
Taxes	0	-913	-783	-649	-511	-367	-219	-66	92	256	426	601	783	971	1,166	1,368	1,578	1,796	2,021	2,255	2,499	2,751	3,013	3,286	3,569	3,863	4,169	4,488	4,820	5,165	5,524
Cash Flow After Taxes	-11,350	1,284	1,490	1,699	1,910	2,123	2,339	2,557	2,778	3,000	3,224	3,450	3,678	3,908	4,139	4,372	4,606	4,841	5,076	5,313	5,550	5,787	6,025	6,262	6,498	6,734	6,968	7,201	7,432	7,661	7,887

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 (3.00%)	$ 606,816
Cap Rate (6.72%) & NOI	$ 444,173
Gross Rent Multiplier	$ 444,039

Sale Proceeds

Projected Selling Price	$ 606,816
Costs of Sale (6.00%)	$ 36,409
Net Sale Proceeds Before Tax	$ 570,407

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	$ 570,407
Investor Cash Outlay	$ 11,350
Net Assets	$ 559,057
Average Yield
Annual Net Assets	$ 18,635
Average Cash Flow (After Taxes)	$ 4,264
Average Annual Gain (After Taxes)	$ 22,899
Average Annual Yield (After Taxes)	9.16 %

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: 4801 S Shrank Dr, Independence RENTAL PUBLISHED

Property Report :

4801 S Shrank Dr, Independence, MO 64055

Executive Summary