501 Kentucky St SE, Albuquerque NM 87108

501 Kentucky St SE, Albuquerque, NM 87108

Multifamily:

Investment strategy: Rental Property

Purchase Price$ 319,000

Rent$ 2,039/mo

Monthly Cash Flow$ -594

Cash on Cash Return-9.23 %

Financial Analysis

Cash on Cash Return	-9.23 %
Internal Rate of Return (IRR)	2.39 %
Capitalization Rate	3.84 %
Gross Rent Multiplier (GRM)	13.04
Debt-coverage Ratio (DCR)	0.63
Operating Expense Ratio (OER)	50.00 %

Financial Breakdown

Purchase Price	$ 319,000
Purchase Costs	$ 9,402
Repair/Construction Costs	$ 4,000
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 332,402
Financing	$ 255,200
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 77,202
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.	$ 66,352
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.	$ 10,850

Operating Analysis

Rent	$ 2,039/mo
Gross Operating Income (GOI)	$ 24,468
Total Expenses	$ 12,234
Net Operating Income (NOI)	$ 12,234
Annual Debt Service	$ 19,356
Cash Flow Before Taxes (CFBT)	$ -7,122
Income Tax Liability	$ -3,388
Cash Flow After Taxes (CFAT)	$ -3,735

Purchase Price	$ 319,000
Address	501 Kentucky St SE , Albuquerque, 87108, NM
MLS^® #	1065735
Listing Agent	Janet "Ashley" McDavid-Fitak
Type	Multifamily
Number of Units	4

Property History

Date	Price	Event
11/30/2024	435000	Price Changed
10/15/2024	440000	Price Changed
6/24/2024	450000	Listed
3/30/2021		Sold
3/5/2021	360000	Listed
1/21/2019		Sold
2/26/2018		Sold
1/21/2018	152000	Listed
11/24/2008		Sold
10/16/2005		Sold
6/3/2005	200000	Listed
8/2/2004		Sold
2/28/1994		Sold
11/17/1993	117600	Listed

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.	$ 24,468
Total Gross Income	$ 24,468
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.	$ 0
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.	$ 24,468	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).
50% rule	$ 12,234	50.00 %
Total Expenses	$ 12,234	50.00 %
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.	$ 12,234	50.00 %

Cash Flow (Year 1)

Net Operating Income	$ 12,234	50.00 %
Annual Debt Service	$ 19,356	79.11 %
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.	$ -7,122	-29.11 %
Income Tax Liability	$ -3,388	-13.84 %
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.	$ -3,735	-15.26 %

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).	50.00 %
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.	129.11 %

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.	$ -57,331
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.	2.39 %
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	0.26
Annual Depreciation	$ 9,280

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.	-9.23 %
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.	3.17 %
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.	3.84 %
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.	7.67 %
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.	13.04

Financing
Down Payment		$ 63,800
Loan		$ 255,200
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).		79.01 %
Debt Coverage Ratio		0.63

Loan Financing of: Purchase price ($ 319,000)
Type	Amortized
Loan Amount	$ 255,200
Down payment (20%)	$ 63,800
Amortization	30 years
Interest Rate	6.50 %
Monthly Payment	$ 1,613.04

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	24,468	24,957	25,457	25,966	26,485	27,015	27,555	28,106	28,668	29,242	29,826	30,423	31,031	31,652	32,285	32,931	33,589	34,261	34,946	35,645	36,358	37,085	37,827	38,584	39,355	40,142	40,945	41,764	42,599	43,451
Vacancy Loss	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
Gross Operating Income	0	24,468	24,957	25,457	25,966	26,485	27,015	27,555	28,106	28,668	29,242	29,826	30,423	31,031	31,652	32,285	32,931	33,589	34,261	34,946	35,645	36,358	37,085	37,827	38,584	39,355	40,142	40,945	41,764	42,599	43,451
Expenses	0	12,234	12,479	12,728	12,983	13,242	13,507	13,777	14,053	14,334	14,621	14,913	15,211	15,516	15,826	16,143	16,465	16,795	17,131	17,473	17,823	18,179	18,543	18,914	19,292	19,678	20,071	20,473	20,882	21,300	21,726
Net Operating Income	0	12,234	12,479	12,728	12,983	13,242	13,507	13,777	14,053	14,334	14,621	14,913	15,211	15,516	15,826	16,143	16,465	16,795	17,131	17,473	17,823	18,179	18,543	18,914	19,292	19,678	20,071	20,473	20,882	21,300	21,726
Loan Payment	0	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356	19,356
Payment Interest Part	0	16,504	16,313	16,109	15,892	15,660	15,412	15,148	14,866	14,565	14,244	13,902	13,537	13,147	12,731	12,287	11,814	11,309	10,770	10,195	9,581	8,927	8,228	7,483	6,688	5,839	4,934	3,968	2,937	1,838	665
Payment Principal Part	0	2,852	3,043	3,247	3,465	3,697	3,944	4,209	4,490	4,791	5,112	5,454	5,820	6,209	6,625	7,069	7,542	8,048	8,587	9,162	9,775	10,430	11,128	11,874	12,669	13,517	14,422	15,388	16,419	17,519	18,692
Cash Flow
Repairs/Construction	4,000	0	5,000	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	-77,202	-7,122	-11,878	-6,628	-6,374	-6,114	-5,849	-5,579	-5,303	-5,022	-4,736	-4,443	-4,145	-3,841	-3,530	-3,214	-2,891	-2,562	-2,226	-1,883	-1,534	-1,177	-814	-443	-65	321	715	1,116	1,526	1,943	2,369
Depreciation	0	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280	9,280
Taxes	0	-3,388	-4,529	-3,165	-3,047	-2,924	-2,796	-2,663	-2,523	-2,378	-2,226	-2,067	-1,901	-1,728	-1,546	-1,356	-1,157	-949	-730	-500	-260	-7	259	538	831	1,140	1,464	1,806	2,166	2,545	2,945
Cash Flow After Taxes	-77,202	-3,735	-7,349	-3,463	-3,326	-3,190	-3,053	-2,916	-2,780	-2,645	-2,510	-2,376	-2,244	-2,113	-1,984	-1,858	-1,734	-1,613	-1,496	-1,383	-1,274	-1,170	-1,072	-981	-896	-818	-750	-690	-641	-602	-576

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.

Capitalization (8.00%) & NOI	$ 271,571
Appreciation (3.00%)	$ 774,297
Gross Rent Multiplier	$ 566,606

Sale Proceeds

Projected Selling Price	$ 271,571
Costs of Sale (6.00%)	$ 16,294
Net Sale Proceeds Before Tax	$ 255,277

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	$ 255,277
Investor Cash Outlay	$ 77,202
Net Assets	$ 178,075
Average Yield
Annual Net Assets	$ 5,936
Average Cash Flow (After Taxes)	$ -2,022
Average Annual Gain (After Taxes)	$ 3,914
Average Annual Yield (After Taxes)	1.23 %

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: 501 Kentucky St SE, Albuquerque RENTAL

Property Report :

501 Kentucky St SE, Albuquerque, NM 87108

Executive Summary