519 E 87th St, New York NY 10128

519 E 87th St, New York, NY 10128

Condominium: 2 rooms: , 1 bathroom

Investment strategy: Rental Property

Purchase Price$ 225,000

Rent$ 2,650/mo

Monthly Cash Flow$ 613

Cash on Cash Return29.14 %

Financial Analysis

Cash on Cash Return	29.14 %
Internal Rate of Return (IRR)	29.17 %
Capitalization Rate	7.82 %
Gross Rent Multiplier (GRM)	7.08
Debt-coverage Ratio (DCR)	1.72
Operating Expense Ratio (OER)	39.17 %

Financial Breakdown

Purchase Price	$ 225,000
Purchase Costs	$ 2,750
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).	$ 227,750
Financing	$ 202,500
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 25,250
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.	$ 22,500
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.	$ 2,750

Operating Analysis

Rent	$ 2,650/mo
Gross Operating Income (GOI)	$ 28,938
Total Expenses	$ 11,336
Net Operating Income (NOI)	$ 17,602
Annual Debt Service	$ 10,245
Cash Flow Before Taxes (CFBT)	$ 7,357
Income Tax Liability	$ 1,260
Cash Flow After Taxes (CFAT)	$ 6,097

Purchase Price	$ 225,000
Address	519 E 87th St , New York, 10128, NY
Type	Condominium
Bathrooms	1
Rooms Total	2

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.	$ 31,800
	$ 0
Total Gross Income	$ 31,800
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.	$ 2,862
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.	$ 28,938	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	$ 1,447	5.00 %
Insurance	$ 68	0.23 %
Repairs	$ 1,447	5.00 %
Property tax	$ 274	0.95 %
HOA	$ 8,100	27.99 %
Total Expenses	$ 11,336	39.17 %
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.	$ 17,602	60.83 %

Cash Flow (Year 1)

Net Operating Income	$ 17,602	60.83 %
Annual Debt Service	$ 10,245	35.40 %
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.	$ 7,357	25.42 %
Income Tax Liability	$ 1,260	4.35 %
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.	$ 6,097	21.07 %

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).	39.17 %
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.	74.58 %

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.	$ 186,704
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.	29.17 %
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	8.39
Annual Depreciation	$ 6,545

Holding period of 20 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.	29.14 %
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.	55.87 %
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.	7.82 %
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.	14.13 %
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.	7.08

Financing
Down Payment		$ 22,500
Loan		$ 202,500
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.		90.00 %
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).		90.00 %
Debt Coverage Ratio		1.72

Loan Financing of: Purchase price ($ 225,000)
Type	Amortized
Loan Amount	$ 202,500
Down payment (10%)	$ 22,500
Amortization	30 years
Interest Rate	3.00 %
Monthly Payment	$ 853.75

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
Operational Analysis
Gross Scheduled Income	0	31,800	32,436	33,085	33,746	34,421	35,110	35,812	36,528	37,259	38,004	38,764	39,539	40,330	41,137	41,959	42,799	43,655	44,528	45,418	46,327
Vacancy Loss	0	2,862	2,919	2,978	3,037	3,098	3,160	3,223	3,288	3,353	3,420	3,489	3,559	3,630	3,702	3,776	3,852	3,929	4,008	4,088	4,169
Gross Operating Income	0	28,938	29,517	30,107	30,709	31,323	31,950	32,589	33,241	33,905	34,584	35,275	35,981	36,700	37,434	38,183	38,947	39,726	40,520	41,331	42,157
Expenses	0	11,336	11,563	11,794	12,030	12,270	12,516	12,766	13,021	13,282	13,547	13,818	14,095	14,377	14,664	14,957	15,257	15,562	15,873	16,190	16,514
Net Operating Income	0	17,602	17,954	18,313	18,680	19,053	19,434	19,823	20,219	20,624	21,036	21,457	21,886	22,324	22,770	23,226	23,690	24,164	24,647	25,140	25,643
Loan Payment	0	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245	10,245
Payment Interest Part	0	6,017	5,889	5,756	5,620	5,479	5,334	5,185	5,031	4,872	4,709	4,540	4,367	4,188	4,004	3,814	3,618	3,417	3,209	2,995	2,774
Payment Principal Part	0	4,228	4,356	4,489	4,625	4,766	4,911	5,060	5,214	5,373	5,536	5,705	5,878	6,057	6,241	6,431	6,627	6,828	7,036	7,250	7,471
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
Cash Flow Before Taxes	-25,250	7,357	7,709	8,068	8,435	8,808	9,189	9,578	9,974	10,379	10,791	11,212	11,641	12,079	12,525	12,981	13,445	13,919	14,402	14,895	15,398
Depreciation	0	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545	6,545
Taxes	0	1,260	1,380	1,503	1,629	1,757	1,889	2,023	2,161	2,302	2,446	2,593	2,744	2,898	3,055	3,217	3,382	3,551	3,723	3,900	4,081
Cash Flow After Taxes	-25,250	6,097	6,329	6,565	6,806	7,051	7,300	7,555	7,813	8,077	8,346	8,619	8,898	9,181	9,470	9,764	10,064	10,368	10,679	10,995	11,317

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 20 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 406,375
Cap Rate (7.82%) & NOI	$ 327,916
Gross Rent Multiplier	$ 327,992

Sale Proceeds

Projected Selling Price	$ 406,375
Costs of Sale (6.00%)	$ 24,383
1. Loan Balance Payoff	$ 88,416
Net Sale Proceeds Before Tax	$ 293,577

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	$ 293,577
Investor Cash Outlay	$ 25,250
Net Assets	$ 268,327
Average Yield
Annual Net Assets	$ 13,416
Average Cash Flow (After Taxes)	$ 7,999
Average Annual Gain (After Taxes)	$ 21,415
Average Annual Yield (After Taxes)	9.52 %

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: 519 E 87th St, New York RENTAL

Property Report :

519 E 87th St, New York, NY 10128

Executive Summary