610 Webster St, Cary NC 27511

610 Webster St, Cary, NC 27511

Singlefamily: , 2 bathrooms

Year built: 1974, Size: 1743 SF

Investment strategy: Rental Property

Purchase Price$ 259,900

Rent$ 1,198/mo

Monthly Cash Flow$ -194

Cash on Cash Return-4.48 %

Financial Analysis

Cash on Cash Return	-4.48 %
Internal Rate of Return (IRR)	6.38 %
Capitalization Rate	3.69 %
Gross Rent Multiplier (GRM)	18.08
Debt-coverage Ratio (DCR)	0.80
Operating Expense Ratio (OER)	25.93 %

Financial Breakdown

Purchase Price	$ 259,900
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).	$ 259,900
Financing	$ 207,920
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 51,980
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.	$ 51,980
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.	$ 0

Operating Analysis

Rent	$ 1,198/mo
Gross Operating Income (GOI)	$ 12,938
Total Expenses	$ 3,355
Net Operating Income (NOI)	$ 9,583
Annual Debt Service	$ 11,912
Cash Flow Before Taxes (CFBT)	$ -2,328
Income Tax Liability	$ -3,114
Cash Flow After Taxes (CFAT)	$ 786

610 Webster St, Cary, NC 27511 is a single family home built in 1974. This property was last sold for $96,000 in 1992 and currently has an estimated value of $338,200. According to the Cary public records, the property at 610 Webster St, Cary, NC 27511 has approximately 1743 square feet, with a lot size of 0.29 acres. Nearby schools include East Cary Middle School, Cary Elementary and Cary High.

Purchase Price	$ 259,900
Address	610 Webster St , Cary, 27511, NC
Year Built	1974
Type	Singlefamily
Size	1743 SF
Bathrooms	2

Property History

Date	Price	Change	Event
10/29/1992
6/1/1990

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.	$ 14,376
Total Gross Income	$ 14,376
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.	$ 1,438
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.	$ 12,938	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	$ 948	7.33 %
Property tax	$ 2,407	18.60 %
Total Expenses	$ 3,355	25.93 %
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.	$ 9,583	74.07 %

Cash Flow (Year 1)

Net Operating Income	$ 9,583	74.07 %
Annual Debt Service	$ 11,912	92.07 %
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.	$ -2,328	-18.00 %
Income Tax Liability	$ -3,114	-24.07 %
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.	$ 786	6.07 %

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).	25.93 %
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.	118.00 %

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.	$ 23,441
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.	6.38 %
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	1.45
Annual Depreciation	$ 7,561

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.	-4.48 %
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.	0.52 %
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.	3.69 %
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.	5.53 %
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.	18.08

Financing
Down Payment		$ 51,980
30y		$ 207,920
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).		80.00 %
Debt Coverage Ratio		0.80

30y Financing of: Purchase price ($ 259,900)
Type	Amortized
Loan Amount	$ 207,920
Down payment (20%)	$ 51,980
Amortization	30 years
Interest Rate	4.00 %
Monthly Payment	$ 992.64

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	14,376	14,520	14,665	14,812	14,960	15,109	15,260	15,413	15,567	15,723	15,880	16,039	16,199	16,361	16,525	16,690	16,857	17,026	17,196	17,368	17,541	17,717	17,894	18,073	18,254	18,436	18,621	18,807	18,995	19,185
Vacancy Loss	0	1,438	1,452	1,467	1,481	1,496	1,511	1,526	1,541	1,557	1,572	1,588	1,604	1,620	1,636	1,652	1,669	1,686	1,703	1,720	1,737	1,754	1,772	1,789	1,807	1,825	1,844	1,862	1,881	1,899	1,918
Gross Operating Income	0	12,938	13,068	13,198	13,330	13,464	13,598	13,734	13,872	14,010	14,151	14,292	14,435	14,579	14,725	14,872	15,021	15,171	15,323	15,476	15,631	15,787	15,945	16,105	16,266	16,428	16,593	16,759	16,926	17,095	17,266
Expenses	0	3,355	3,422	3,491	3,560	3,632	3,704	3,778	3,854	3,931	4,010	4,090	4,172	4,255	4,340	4,427	4,515	4,606	4,698	4,792	4,888	4,985	5,085	5,187	5,291	5,396	5,504	5,614	5,727	5,841	5,958
Net Operating Income	0	9,583	9,646	9,708	9,770	9,832	9,894	9,956	10,018	10,080	10,141	10,202	10,263	10,324	10,385	10,446	10,506	10,566	10,625	10,684	10,743	10,802	10,860	10,918	10,975	11,032	11,088	11,144	11,200	11,254	11,308
Loan Payment	0	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912	11,912
Payment Interest Part	0	8,250	8,101	7,946	7,784	7,616	7,441	7,259	7,069	6,872	6,667	6,453	6,231	5,999	5,758	5,507	5,247	4,975	4,692	4,398	4,092	3,774	3,442	3,097	2,738	2,364	1,975	1,570	1,149	710	254
Payment Principal Part	0	3,662	3,811	3,966	4,128	4,296	4,471	4,653	4,842	5,040	5,245	5,459	5,681	5,913	6,153	6,404	6,665	6,937	7,219	7,513	7,820	8,138	8,470	8,815	9,174	9,548	9,937	10,341	10,763	11,201	11,658
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	-51,980	-2,328	-2,266	-2,204	-2,142	-2,080	-2,017	-1,956	-1,894	-1,832	-1,771	-1,709	-1,648	-1,587	-1,527	-1,466	-1,406	-1,346	-1,287	-1,227	-1,168	-1,110	-1,052	-994	-937	-880	-823	-767	-712	-657	-603
Depreciation	0	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561	7,561
Taxes	0	-3,114	-3,008	-2,899	-2,788	-2,672	-2,554	-2,432	-2,306	-2,177	-2,043	-1,906	-1,764	-1,618	-1,467	-1,311	-1,151	-985	-814	-637	-455	-266	-71	130	338	553	776	1,006	1,245	1,491	1,747
Cash Flow After Taxes	-51,980	786	742	696	646	593	536	476	412	345	273	196	116	31	-60	-155	-255	-361	-472	-590	-713	-843	-980	-1,124	-1,275	-1,433	-1,599	-1,774	-1,957	-2,149	-2,350

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%)	$ 350,306
Cap Rate (3.69%) & NOI	$ 306,460
Gross Rent Multiplier	$ 346,862

Sale Proceeds

Projected Selling Price	$ 350,306
Costs of Sale (6.00%)	$ 21,018
Net Sale Proceeds Before Tax	$ 329,288

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	$ 329,288
Investor Cash Outlay	$ 51,980
Net Assets	$ 277,308
Average Yield
Annual Net Assets	$ 9,244
Average Cash Flow (After Taxes)	$ -330
Average Annual Gain (After Taxes)	$ 8,914
Average Annual Yield (After Taxes)	3.43 %

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: 610 Webster St, Cary RENTAL

Property Report :

610 Webster St, Cary, NC 27511

Executive Summary