2/2: 6763 Nebraska Ave, Hammond IN 46323

6763 Nebraska Ave, Hammond, IN 46323

Townhouse: 8 rooms: 2 bedrooms , 2 bathrooms

Year built: 1970, Size: 1056 SF

Investment strategy: Rental Property

Purchase Price$USD 40,000

Rent$USD 1,100/mo

Monthly Cash Flow$USD 550

Cash on Cash Return13.09 %

Financial Analysis

Cash on Cash Return	13.09 %
Internal Rate of Return (IRR)	15.05 %
Capitalization Rate	9.17 %
Gross Rent Multiplier (GRM)	5.45
Debt-coverage Ratio (DCR)	0.00
Operating Expense Ratio (OER)	50.00 %
After Repair Value	$USD 72,000
Profit/Equity From Rehab	$USD 21,590

Financial Breakdown

Purchase Price	$USD 40,000
Purchase Costs	$USD 410
Repair/Construction Costs	$USD 10,000
Total Capital Needed Total Capital Needed Includes all projects costs (except selling costs). Total Capital Needed Includes all projects costs (except selling costs).	$USD 50,410
Financing	$USD 0
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$USD 50,410
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.	$USD 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.	$USD 50,410

Operating Analysis

Rent	$USD 1,100/mo
Gross Operating Income (GOI)	$USD 13,200
Total Expenses	$USD 6,600
Net Operating Income (NOI)	$USD 6,600
Annual Debt Service	$USD 0
Cash Flow Before Taxes (CFBT)	$USD 6,600
Income Tax Liability	$USD 1,359
Cash Flow After Taxes (CFAT)	$USD 5,241

Amazing Rental opportunity located near Purdue University Northwest. Good school district and close access to I-94. Home has been well kept and requires very few if any repairs. Property consists of 2 Bedrooms and 1.5 Bathrooms. Partially finished basement with a bonus 3rd Bedroom as well. Currently occupied by long term tenants of 10+ years on a month-month basis. Current tenant pays $750/month + all utilities but market rent can be set at $950+/month. Get your hands on this Townhome that has ZERO HOA fees Today!

Purchase Price	$USD 40,000
Address	6763 Nebraska Ave , Hammond, 46323, IN
Year Built	1970
Type	Townhouse
Size	1056 SF
Bedrooms	2
Bathrooms	2
Rooms Total	8

6763 Nebraska Ave Hammond, IN 46323

$USD 72,000

Property ARV
Townhouse

Bldg type
1,056

SqFt
$USD 68

per SqFt
2

Beds
2

Baths

#	Property address	Distance	Beds	Baths	SqFt	Date sold	Sale price	$/SqFt
1	6327 Nevada Ave	0.6mi	3	1	1,056	03/27/2019	$USD 87,500	$USD 83
2	6428 Nebraska Ave	0.4mi	3	1	672	08/14/18	$USD 89,500	$USD 133
3	6408 Nebraska Ave	0.5mi	3	1	984	05/03/2019	$USD 85,000	$USD 86
4	3128 Kenwood St	0.8mi	2	1	958	12/10/2018	$USD 97,500	$USD 102
Average:							$USD 89,875	$USD 101

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.	$USD 13,200
Total Gross Income	$USD 13,200
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.	$USD 0
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.	$USD 13,200	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).
50% rule	$USD 6,600	50.00 %
Total Expenses	$USD 6,600	50.00 %
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.	$USD 6,600	50.00 %

Cash Flow (Year 1)

Net Operating Income	$USD 6,600	50.00 %
Annual Debt Service	$USD 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.	$USD 6,600	50.00 %
Income Tax Liability	$USD 1,359	10.30 %
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.	$USD 5,241	39.70 %

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).	50.00 %
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.	50.00 %

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.	$USD 49,197
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.	15.05 %
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	1.98
Annual Depreciation	$USD 1,164

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.	13.09 %
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.	15.47 %
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.	9.17 %
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.	33.00 %
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.	5.45

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
Operational Analysis
Gross Scheduled Income	0	13,200	13,464	13,733	14,008	14,288	14,574	14,865	15,163	15,466	15,775
Vacancy Loss	0	0	0	0	0	0	0	0	0	0	0
Gross Operating Income	0	13,200	13,464	13,733	14,008	14,288	14,574	14,865	15,163	15,466	15,775
Expenses	0	6,600	6,732	6,867	7,004	7,144	7,287	7,433	7,581	7,733	7,888
Net Operating Income	0	6,600	6,732	6,867	7,004	7,144	7,287	7,433	7,581	7,733	7,888
Cash Flow
Repairs/Construction	10,000	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-50,410	6,600	6,732	6,867	7,004	7,144	7,287	7,433	7,581	7,733	7,888
Depreciation	0	1,164	1,164	1,164	1,164	1,164	1,164	1,164	1,164	1,164	1,164
Taxes	0	1,359	1,392	1,426	1,460	1,495	1,531	1,567	1,604	1,642	1,681
Cash Flow After Taxes	-50,410	5,241	5,340	5,441	5,544	5,649	5,756	5,866	5,977	6,091	6,207

Note: All amounts in the table above are in $USD

Resale Price Evaluation Methods

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

Appreciation (3.00%)	$USD 96,762
Cap Rate (9.17%) & NOI	$USD 86,015
Gross Rent Multiplier	$USD 85,975

Sale Proceeds

Projected Selling Price	$USD 96,762
Costs of Sale (6.00%)	$USD 5,806
Net Sale Proceeds Before Tax	$USD 90,956

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	$USD 90,956
Investor Cash Outlay	$USD 50,410
Net Assets	$USD 40,546
Average Yield
Annual Net Assets	$USD 4,055
Average Cash Flow (After Taxes)	$USD 5,090
Average Annual Gain (After Taxes)	$USD 9,145
Average Annual Yield (After Taxes)	22.86 %

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.

There is no financing selected in this deal.

Property Report: 2/2 RENTAL

Property Report :

2/2

6763 Nebraska Ave, Hammond, IN 46323

Executive Summary

6763 Nebraska Ave, Hammond, IN 46323

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

Comparative Sales Analysis

$USD 72,000

Property ARV

Townhouse

Bldg type

1,056

SqFt

$USD 68

per SqFt

2

Beds

2

Baths

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

Long-term Cash Flow Forecast

Resale Analysis

Resale Price Evaluation Methods

Sale Proceeds

Net Assets and Yield

Lender Report

Photos