Rue Viger, Shawi: 543-557 Rue Viger, Shawinigan QC G9N4J7, CA

543-557 Rue Viger, Shawinigan, QC G9N4J7

Multi-Family: 2 bedrooms , 1 bathroom

Year built: 1940,

Investment strategy: Rental Property

Purchase Price$ 450,000

Rent$ 3,570/mo

Monthly Cash Flow$ -832

Cash on Cash Return-19.03 %

Financial Analysis

Cash on Cash Return	-19.03 %
Internal Rate of Return (IRR)	8.90 %
Capitalization Rate	5.21 %
Gross Rent Multiplier (GRM)	10.50
Debt-coverage Ratio (DCR)	0.70
Operating Expense Ratio (OER)	43.58 %

Financial Breakdown

Purchase Price	$ 450,000
Purchase Costs	$ 15,000
Repair/Construction Costs	$ 15,000
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$ 480,000
Financing	$ 427,500
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 52,500
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.	$ 30,000

Operating Analysis

Rent	$ 3,570/mo
Gross Operating Income (GOI)	$ 41,555
Total Expenses	$ 18,109
Net Operating Income (NOI)	$ 23,446
Annual Debt Service	$ 33,434
Cash Flow Before Taxes (CFBT)	$ -9,988
Income Tax Liability	$ -3,902
Cash Flow After Taxes (CFAT)	$ -6,087

Excellente opportunité d'acquérir ce 6 x 4.5 avec un RBA de 41 640$. Très bon entretien: Revêtement de toiture 2020, partie de l'escalier avant complètement changé, entretien complet des galeries, plusieurs rampes changées, garage solidifié avec armature de métal. Grands lockers intérieurs dans les logements ainsi qu'une grande véranda vitrée avec lockers. Possibilité d'augmenter les revenus. Prix demandé à 10.8 x le revenu brut, 75 000$/porte, ou 15 x net. Facile de location, situé près de tout, ne manquez pas cet immeuble ! (36166161)

Purchase Price	$ 450,000
Address	543-557 Rue Viger , Shawinigan, G9N4J7, QC, CA
MLS^® #	10125279
Year Built	1940
Type	Multi-Family
Bedrooms	2
Bathrooms	1

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.	$ 42,840
Total Gross Income	$ 42,840
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.	$ 1,285
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.	$ 41,555	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	$ 2,493	6.00 %
Utilities	$ 1,800	4.33 %
Insurance	$ 2,700	6.50 %
Repairs	$ 4,155	10.00 %
Taxes municipales	$ 6,812	16.39 %
Taxes scolaire	$ 148	0.36 %
Total Expenses	$ 18,109	43.58 %
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.	$ 23,446	56.42 %

Cash Flow (Year 1)

Net Operating Income	$ 23,446	56.42 %
Annual Debt Service	$ 33,434	80.46 %
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.	$ -9,988	-24.04 %
Income Tax Liability	$ -3,902	-9.39 %
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.	$ -6,087	-14.65 %

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).	43.58 %
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.	124.04 %

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.	$ 173,236
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.	8.90 %
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	4.30
Annual Depreciation	$ 13,091

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.	-19.03 %
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.	6.69 %
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.	5.21 %
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.	9.52 %
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.	10.50

Financing
Down Payment		$ 22,500
Hypothèque conventionnelle		$ 427,500
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.		95.00 %
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).		91.94 %
Debt Coverage Ratio		0.70

Hypothèque conventionnelle Financing of: Purchase price ($ 450,000)
Type	Amortized
Loan Amount	$ 427,500
Down payment (5%)	$ 22,500
Amortization	25 years
Interest Rate	6.20 %
Monthly Payment	$ 2,786.20

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	42,840	43,697	44,571	45,462	46,371	47,299	48,245	49,210	50,194	51,198	52,222	53,266	54,331	55,418	56,526	57,657	58,810	59,986	61,186	62,410	63,658	64,931	66,230	67,554	68,905	70,284	71,689	73,123	74,585	76,077
Vacancy Loss	0	1,285	1,311	1,337	1,364	1,391	1,419	1,447	1,476	1,506	1,536	1,567	1,598	1,630	1,663	1,696	1,730	1,764	1,800	1,836	1,872	1,910	1,948	1,987	2,027	2,067	2,109	2,151	2,194	2,238	2,282
Gross Operating Income	0	41,555	42,386	43,234	44,098	44,980	45,880	46,797	47,733	48,688	49,662	50,655	51,668	52,702	53,756	54,831	55,927	57,046	58,187	59,350	60,537	61,748	62,983	64,243	65,528	66,838	68,175	69,539	70,929	72,348	73,795
Expenses	0	18,109	18,471	18,840	19,217	19,602	19,994	20,393	20,801	21,217	21,642	22,075	22,516	22,966	23,426	23,894	24,372	24,859	25,357	25,864	26,381	26,909	27,447	27,996	28,556	29,127	29,709	30,304	30,910	31,528	32,158
Net Operating Income	0	23,446	23,915	24,393	24,881	25,379	25,886	26,404	26,932	27,471	28,020	28,581	29,152	29,735	30,330	30,937	31,555	32,186	32,830	33,487	34,156	34,840	35,536	36,247	36,972	37,711	38,466	39,235	40,020	40,820	41,637
Loan Payment	0	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	33,434	0	0	0	0	0
Payment Interest Part	0	25,962	25,491	24,991	24,459	23,894	23,294	22,655	21,977	21,255	20,488	19,673	18,807	17,886	16,907	15,866	14,760	13,585	12,335	11,006	9,594	8,093	6,498	4,802	2,999	1,083	0	0	0	0	0
Payment Principal Part	0	7,473	7,943	8,443	8,975	9,540	10,141	10,779	11,458	12,179	12,946	13,761	14,628	15,549	16,527	17,568	18,674	19,850	21,100	22,428	23,840	25,341	26,937	28,633	30,435	32,352	0	0	0	0	0
Cash Flow
Repairs/Construction	15,000	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	0	0
Cash Flow Before Taxes	-52,500	-9,988	-9,519	-9,041	-8,553	-8,056	-7,548	-7,030	-6,502	-5,964	-5,414	-4,854	-4,282	-3,699	-3,104	-2,498	-1,879	-1,248	-604	52	722	1,405	2,102	2,813	3,538	4,277	38,466	39,235	40,020	40,820	41,637
Depreciation	0	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091	13,091
Taxes	0	-3,902	-3,667	-3,422	-3,167	-2,902	-2,625	-2,336	-2,034	-1,719	-1,390	-1,046	-686	-310	83	495	926	1,378	1,851	2,347	2,868	3,414	3,987	4,589	5,221	5,884	6,344	6,536	6,732	6,932	7,136
Cash Flow After Taxes	-52,500	-6,087	-5,853	-5,619	-5,386	-5,154	-4,923	-4,695	-4,468	-4,245	-4,024	-3,808	-3,596	-3,389	-3,187	-2,993	-2,805	-2,626	-2,455	-2,295	-2,146	-2,009	-1,885	-1,776	-1,683	-1,607	32,122	32,699	33,288	33,888	34,500

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%)	$ 1,092,268
Cap Rate (5.21%) & NOI	$ 799,165
Gross Rent Multiplier	$ 798,810

Sale Proceeds

Projected Selling Price	$ 1,092,268
Costs of Sale (5.00%)	$ 54,613
Net Sale Proceeds Before Tax	$ 1,037,655

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	$ 1,037,655
Investor Cash Outlay	$ 52,500
Net Assets	$ 985,155
Average Yield
Annual Net Assets	$ 32,839
Average Cash Flow (After Taxes)	$ 1,443
Average Annual Gain (After Taxes)	$ 34,281
Average Annual Yield (After Taxes)	7.62 %

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: Rue Viger, Shawi RENTAL

Property Report :

Rue Viger, Shawi

543-557 Rue Viger, Shawinigan, QC G9N4J7

Executive Summary

543-557 Rue Viger, Shawinigan, QC G9N4J7

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