PALMETTO : 6534 Palmetto St, Cincinnati OH 45227

6534 Palmetto St, Cincinnati, OH 45227

Singlefamily: 3 bedrooms , 1.5 bathrooms

Year built: 1936, Size: 1027 SF

Investment strategy: Rental Property

Purchase Price$ 211,900

Rent$ 1,800/mo

Monthly Cash Flow$ 440

Cash on Cash Return9.86 %

Financial Analysis

Cash on Cash Return	9.86 %
Internal Rate of Return (IRR)	17.36 %
Capitalization Rate	7.60 %
Gross Rent Multiplier (GRM)	9.81
Debt-coverage Ratio (DCR)	1.49
Operating Expense Ratio (OER)	23.89 %

Financial Breakdown

Purchase Price	$ 211,900
Purchase Costs	$ 600
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).	$ 212,500
Financing	$ 158,925
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 53,575
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.	$ 52,975
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.	$ 600

Operating Analysis

Rent	$ 1,800/mo
Gross Operating Income (GOI)	$ 21,168
Total Expenses	$ 5,058
Net Operating Income (NOI)	$ 16,110
Annual Debt Service	$ 10,828
Cash Flow Before Taxes (CFBT)	$ 5,282
Income Tax Liability	$ 315
Cash Flow After Taxes (CFAT)	$ 4,967

Move in and start enjoying this versatile floor plan! New roof, updated kitchen! Great ceiling height 9'! Gorgeous, original wood windows that all work! Lower level study is a perfect home workspace, lots of electric! Lots of driveway parking! Walking distance to shops and eateries! Home warranty included.

Purchase Price	$ 211,900
Address	6534 Palmetto St , Cincinnati, 45227, OH
MLS^® #	1728338
Listing Agent	Jenny Sarver
Listing Broker	COMEY & SHEPHERD REALTORS - Ma
Year Built	1936
Type	Singlefamily
Size	1027 SF
Bedrooms	3
Bathrooms	1.5

Property History

Date	Price	Change	Event
3/31/1997
9/19/1995

6534 Palmetto St Cincinnati, OH 45227

$ 1,800

Rent
Singlefamily

Bldg type
1,027

SqFt
3

Beds
1.5

Baths

Your rent is reasonable for the area.

Average

$ 1,414

Median

$ 1,300

25th %

$ 1,025

75th %

$ 1,804

#	Property address	Similarity	Distance	Beds	Baths	SqFt	Date Listed	Bldg type	Rent
1	6716 Britton Ave	91%	0.3mi	3	1.5	1,200	10/27/2021	Single Family	$ 1,495
2	6942 Roe St	91%	0.8mi	3	1	1,042	12/14/2021	Single Family	$ 1,650
3	6916 Cambridge Ave	89%	0.8mi	3	2	1,137	1/11/2022	Single Family	$ 1,995
4	3826 Southern Ave	88%	1.2mi	3	1.5	1,336	1/21/2022	Single Family	$ 1,900

Property address	Similarity	Distance	Beds	Baths	SqFt	Date Listed	Bldg type	Rent
6716 Britton Ave	91%	0.3mi	3	1.5	1,200	10/27/2021	Single Family	$ 1,495
6942 Roe St	91%	0.8mi	3	1	1,042	12/14/2021	Single Family	$ 1,650
6916 Cambridge Ave	89%	0.8mi	3	2	1,137	1/11/2022	Single Family	$ 1,995
5730 Carothers St	88%	1.1mi	3	1	1,152	12/20/2021	Single Family	$ 1,250
3826 Southern Ave	88%	1.2mi	3	1.5	1,336	1/21/2022	Single Family	$ 1,900

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.	$ 21,600
Total Gross Income	$ 21,600
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.	$ 432
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.	$ 21,168	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 tax	$ 4,386	20.72 %
Insurance	$ 672	3.17 %
Total Expenses	$ 5,058	23.89 %
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.	$ 16,110	76.11 %

Cash Flow (Year 1)

Net Operating Income	$ 16,110	76.11 %
Annual Debt Service	$ 10,828	51.15 %
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.	$ 5,282	24.95 %
Income Tax Liability	$ 315	1.49 %
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.	$ 4,967	23.46 %

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).	23.89 %
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.	75.05 %

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.	$ 75,530
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.	17.36 %
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	2.41
Annual Depreciation	$ 6,164

Holding period of 10 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.	9.86 %
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.	21.72 %
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.	7.60 %
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.	10.19 %
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.	9.81

Financing
Down Payment		$ 52,975
Loan		$ 158,925
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.		75.00 %
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).		75.00 %
Debt Coverage Ratio		1.49

Loan Financing of: Purchase price ($ 211,900)
Type	Amortized
Loan Amount	$ 158,925
Down payment (25%)	$ 52,975
Amortization	30 years
Interest Rate	5.50 %
Monthly Payment	$ 902.36

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
Operational Analysis
Gross Scheduled Income	0	21,600	22,032	22,473	22,922	23,381	23,848	24,325	24,812	25,308	25,814
Vacancy Loss	0	432	441	449	458	468	477	487	496	506	516
Gross Operating Income	0	21,168	21,591	22,023	22,464	22,913	23,371	23,839	24,315	24,802	25,298
Expenses	0	5,058	5,159	5,262	5,368	5,475	5,584	5,696	5,810	5,926	6,045
Net Operating Income	0	16,110	16,432	16,761	17,096	17,438	17,787	18,142	18,505	18,875	19,253
Loan Payment	0	10,828	10,828	10,828	10,828	10,828	10,828	10,828	10,828	10,828	10,828
Payment Interest Part	0	8,687	8,567	8,439	8,304	8,162	8,012	7,853	7,685	7,508	7,320
Payment Principal Part	0	2,141	2,262	2,389	2,524	2,666	2,817	2,976	3,143	3,321	3,508
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-53,575	5,282	5,604	5,933	6,268	6,610	6,958	7,314	7,677	8,047	8,425
Depreciation	0	6,164	6,164	6,164	6,164	6,164	6,164	6,164	6,164	6,164	6,164
Taxes	0	315	425	539	657	778	903	1,031	1,164	1,301	1,442
Cash Flow After Taxes	-53,575	4,967	5,179	5,393	5,611	5,832	6,056	6,283	6,513	6,746	6,982

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 10 years. Below is the resale price calculated using different methods.

Appreciation (3.00%)	$ 284,776
Cap Rate (7.60%) & NOI	$ 253,328
Gross Rent Multiplier	$ 253,235

Sale Proceeds

Projected Selling Price	$ 284,776
Costs of Sale (6.00%)	$ 17,087
1. Loan Balance Payoff	$ 131,178
Net Sale Proceeds Before Tax	$ 136,511

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	$ 136,511
Investor Cash Outlay	$ 53,575
Net Assets	$ 82,936
Average Yield
Annual Net Assets	$ 8,294
Average Cash Flow (After Taxes)	$ 5,258
Average Annual Gain (After Taxes)	$ 13,551
Average Annual Yield (After Taxes)	6.40 %

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: PALMETTO RENTAL

Property Report :

PALMETTO

6534 Palmetto St, Cincinnati, OH 45227

Executive Summary

6534 Palmetto St, Cincinnati, OH 45227

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

Property History

Comparative Rental Analysis

$ 1,800

Rent

Singlefamily

Bldg type

1,027

SqFt

3

Beds

1.5

Baths

Rentometer®

Rentometer®

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

Rentometer^®

Rentometer^®