632 Arlington Pl, Macon GA 31201

632 Arlington Pl, Macon, GA 31201

Multifamily: 4 bedrooms , 4 bathrooms

Year built: 1880, Size: 4390 SF

Investment strategy: Rental Property

Purchase Price$ 300,000

Rent$ 3,275/mo

Monthly Cash Flow$ 1,164

Cash on Cash Return21.00 %

Financial Analysis

Cash on Cash Return	21.00 %
Internal Rate of Return (IRR)	25.82 %
Capitalization Rate	9.87 %
Gross Rent Multiplier (GRM)	7.63
Debt-coverage Ratio (DCR)	1.89
Operating Expense Ratio (OER)	20.71 %
After Repair Value	$ 300,000

Financial Breakdown

Purchase Price	$ 300,000
Purchase Costs	$ 6,495
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).	$ 306,495
Financing	$ 240,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 66,495
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.	$ 63,600
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.	$ 2,895

Operating Analysis

Rent	$ 3,275/mo
Gross Operating Income (GOI)	$ 37,335
Total Expenses	$ 7,734
Net Operating Income (NOI)	$ 29,602
Annual Debt Service	$ 15,637
Cash Flow Before Taxes (CFBT)	$ 13,965
Income Tax Liability	$ 2,179
Cash Flow After Taxes (CFAT)	$ 11,786

Beautiful multi-family property located downtown with easy access to Mercer University, hospitals, restaurants, and shops. Each unit has 1BR/1BA/Kit/LR with large closets. 2 units have recently been updated, with 3 new water heaters installed. Plenty of space for off-street parking in the backyard. Current monthly income is $2100 with a projected income of $3275 after leases end, and Unit #4 is completed. Showings during Due Diligence only!

Purchase Price	$ 300,000
Address	632 Arlington Pl , Macon, 31201, GA
MLS^® #	164611
Listing Agent	Mindy Attaway
Listing Broker	CENTURY 21 Crowe Realty
Year Built	1880
Type	Multifamily
Number of Units
Size	4390 SF
Bedrooms	4
Bathrooms	4

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.	$ 39,300
Total Gross Income	$ 39,300
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.	$ 1,965
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.	$ 37,335	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).
Insurance	$ 2,000	5.36 %
Repairs	$ 3,734	10.00 %
Property tax	$ 2,000	5.36 %
Total Expenses	$ 7,734	20.71 %
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.	$ 29,602	79.29 %

Cash Flow (Year 1)

Net Operating Income	$ 29,602	79.29 %
Annual Debt Service	$ 15,637	41.88 %
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.	$ 13,965	37.40 %
Income Tax Liability	$ 2,179	5.84 %
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.	$ 11,786	31.57 %

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).	20.71 %
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.	62.60 %

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.	$ 71,090
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.	25.82 %
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	2.07
Annual Depreciation	$ 8,727

Holding period of 5 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.	21.00 %
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.	34.54 %
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.	9.87 %
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.	13.10 %
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.	7.63

Financing		% of ARV
Down Payment	$ 60,000	20.00 %
Loan	$ 240,000	80.00 %
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		1.89

Loan Financing of: Purchase price ($ 300,000)
Type	Amortized
Loan Amount	$ 240,000
Down payment (20%)	$ 60,000
Amortization	30 years
Interest Rate	5.10 %
Monthly Payment	$ 1,303.08

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
Operational Analysis
Gross Scheduled Income	0	39,300	40,086	40,888	41,705	42,540
Vacancy Loss	0	1,965	2,004	2,044	2,085	2,127
Gross Operating Income	0	37,335	38,082	38,843	39,620	40,413
Expenses	0	7,734	7,888	8,046	8,207	8,371
Net Operating Income	0	29,602	30,194	30,797	31,413	32,042
Loan Payment	0	15,637	15,637	15,637	15,637	15,637
Payment Interest Part	0	12,159	11,978	11,787	11,586	11,374
Payment Principal Part	0	3,477	3,659	3,850	4,051	4,263
Cash Flow
Repairs/Construction	0	0	0	0	0	0
Cash Flow Before Taxes	-66,495	13,965	14,557	15,160	15,776	16,405
Depreciation	0	8,727	8,727	8,727	8,727	8,727
Taxes	0	2,179	2,372	2,571	2,775	2,985
Cash Flow After Taxes	-66,495	11,786	12,184	12,590	13,001	13,420

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 5 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 347,782
Cap Rate (9.87%) & NOI	$ 324,636
Gross Rent Multiplier	$ 324,577

Sale Proceeds

Projected Selling Price	$ 347,782
Costs of Sale (6.00%)	$ 20,867
1. Loan Balance Payoff	$ 220,700
Net Sale Proceeds Before Tax	$ 106,215

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	$ 106,215
Investor Cash Outlay	$ 66,495
Net Assets	$ 39,720
Average Yield
Annual Net Assets	$ 7,944
Average Cash Flow (After Taxes)	$ 9,912
Average Annual Gain (After Taxes)	$ 17,856
Average Annual Yield (After Taxes)	5.95 %

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: 632 Arlington Pl, Macon RENTAL

Property Report :

632 Arlington Pl, Macon, GA 31201

Executive Summary