5324 Padre Ln, Indianapolis IN 46237

5324 Padre Ln, Indianapolis, IN 46237

Singlefamily: 2 bedrooms , 1.5 bathrooms

Year built: 1983, Size: 1064 SF

Investment strategy: Rental Property

Purchase Price$ 168,000

Rent$ 898/mo

Monthly Cash Flow$ 659

Cash on Cash Return4.71 %

Financial Analysis

Cash on Cash Return	4.71 %
Internal Rate of Return (IRR)	4.46 %
Capitalization Rate	4.71 %
Gross Rent Multiplier (GRM)	15.59
Debt-coverage Ratio (DCR)	0.00
Operating Expense Ratio (OER)	18.41 %

Financial Breakdown

Purchase Price	$ 168,000
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).	$ 168,000
Financing	$ 0
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 168,000
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.	$ 0
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.	$ 168,000

Operating Analysis

Rent	$ 898/mo
Gross Operating Income (GOI)	$ 9,698
Total Expenses	$ 1,785
Net Operating Income (NOI)	$ 7,913
Annual Debt Service	$ 0
Cash Flow Before Taxes (CFBT)	$ 7,913
Income Tax Liability	$ 1,513
Cash Flow After Taxes (CFAT)	$ 6,400

Welcome Home! This 2 bedroom home with 1 and 1/2 baths is calling your name! Sit in the sunroom where your morning cup of coffee is calling you. The backyard is fully fenced with barn for your lawn toys. A spacious great room where your furniture can be arranged perfectly to your comfort or liking.

Purchase Price	$ 168,000
Address	5324 Padre Ln , Indianapolis, 46237, IN
MLS^® #	21809748
Listing Agent	Sarah Riggen
Listing Broker	Keller Williams Indy Metro S
Year Built	1983
Type	Singlefamily
Size	1064 SF
Bedrooms	2
Bathrooms	1.5

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.	$ 10,776
Total Gross Income	$ 10,776
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.	$ 1,078
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.	$ 9,698	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	9.78 %
Property tax	$ 669	6.90 %
Insurance	$ 168	1.73 %
Total Expenses	$ 1,785	18.41 %
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.	$ 7,913	81.59 %

Cash Flow (Year 1)

Net Operating Income	$ 7,913	81.59 %
Annual Debt Service	$ 0	0.00 %
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.	$ 7,913	81.60 %
Income Tax Liability	$ 1,513	15.60 %
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.	$ 6,400	66.00 %

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).	18.41 %
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.	18.41 %

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.	$ -15,046
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.	4.46 %
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	0.91
Annual Depreciation	$ 4,887

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.	4.71 %
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.	5.71 %
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.	4.71 %
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.	6.41 %
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.	15.59

There is no financing selected in this deal.

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	10,776	10,884	10,993	11,103	11,214	11,326	11,439	11,553	11,669	11,786	11,903	12,022	12,143	12,264	12,387	12,511	12,636	12,762	12,890	13,019	13,149	13,280	13,413	13,547	13,683	13,820	13,958	14,097	14,238	14,381
Vacancy Loss	0	1,078	1,088	1,099	1,110	1,121	1,133	1,144	1,155	1,167	1,179	1,190	1,202	1,214	1,226	1,239	1,251	1,264	1,276	1,289	1,302	1,315	1,328	1,341	1,355	1,368	1,382	1,396	1,410	1,424	1,438
Gross Operating Income	0	9,698	9,795	9,893	9,992	10,092	10,193	10,295	10,398	10,502	10,607	10,713	10,820	10,928	11,038	11,148	11,260	11,372	11,486	11,601	11,717	11,834	11,952	12,072	12,193	12,314	12,438	12,562	12,688	12,814	12,943
Expenses	0	1,785	1,821	1,857	1,894	1,932	1,971	2,010	2,050	2,091	2,133	2,176	2,219	2,264	2,309	2,355	2,402	2,450	2,499	2,549	2,600	2,652	2,705	2,760	2,815	2,871	2,928	2,987	3,047	3,108	3,170
Net Operating Income	0	7,913	7,975	8,036	8,098	8,160	8,222	8,285	8,348	8,411	8,474	8,537	8,601	8,665	8,729	8,793	8,857	8,922	8,986	9,051	9,116	9,182	9,247	9,312	9,378	9,443	9,509	9,575	9,641	9,707	9,773
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	-168,000	7,913	7,975	8,036	8,098	8,160	8,222	8,285	8,348	8,411	8,474	8,537	8,601	8,665	8,729	8,793	8,857	8,922	8,986	9,051	9,116	9,182	9,247	9,312	9,378	9,443	9,509	9,575	9,641	9,707	9,773
Depreciation	0	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887	4,887
Taxes	0	1,513	1,544	1,575	1,606	1,637	1,668	1,699	1,730	1,762	1,793	1,825	1,857	1,889	1,921	1,953	1,985	2,017	2,050	2,082	2,115	2,147	2,180	2,213	2,245	2,278	2,311	2,344	2,377	2,410	2,443
Cash Flow After Taxes	-168,000	6,400	6,431	6,462	6,493	6,524	6,555	6,586	6,617	6,649	6,680	6,712	6,744	6,776	6,808	6,840	6,872	6,904	6,937	6,969	7,002	7,034	7,067	7,100	7,132	7,165	7,198	7,231	7,264	7,297	7,330

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%)	$ 226,439
Cap Rate (4.71%) & NOI	$ 207,488
Gross Rent Multiplier	$ 224,194

Sale Proceeds

Projected Selling Price	$ 226,439
Costs of Sale (6.00%)	$ 13,586
Net Sale Proceeds Before Tax	$ 212,853

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	$ 212,853
Investor Cash Outlay	$ 168,000
Net Assets	$ 44,853
Average Yield
Annual Net Assets	$ 1,495
Average Cash Flow (After Taxes)	$ 6,615
Average Annual Gain (After Taxes)	$ 8,110
Average Annual Yield (After Taxes)	4.83 %

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: 5324 Padre Ln, Indianapolis RENTAL

Property Report :

5324 Padre Ln, Indianapolis, IN 46237

Executive Summary