6901 Daniel Ranch Drive, Austin TX 78744

6901 Daniel Ranch Drive, Austin, TX 78744

Singlefamily: 5 bedrooms , 3 bathrooms

Year built: 2023, Size: 3475 SF

Investment strategy: Rental Property

Purchase Price$ 583,221

Rent$ 3,000/mo

Monthly Cash Flow$ -880

Cash on Cash Return-4.42 %

Financial Analysis

Cash on Cash Return	-4.42 %
Internal Rate of Return (IRR)	4.96 %
Capitalization Rate	3.22 %
Gross Rent Multiplier (GRM)	16.20
Debt-coverage Ratio (DCR)	0.64
Operating Expense Ratio (OER)	45.60 %
After Repair Value	$ 583,221

Financial Breakdown

Purchase Price	$ 583,221
Purchase Costs	$ 5,832
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).	$ 589,053
Financing	$ 349,933
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 239,120
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.	$ 233,288
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.	$ 5,832

Operating Analysis

Rent	$ 3,000/mo
Gross Operating Income (GOI)	$ 34,560
Total Expenses	$ 15,759
Net Operating Income (NOI)	$ 18,801
Annual Debt Service	$ 29,361
Cash Flow Before Taxes (CFBT)	$ -10,560
Income Tax Liability	$ -6,075
Cash Flow After Taxes (CFAT)	$ -4,485

**BUYER INCENTIVE AVAILABLE, SEE SALES TEAM FOR DETAILS** This beautiful, two-story home offers an open floor plan with 9-ft. first-floor ceilings, Flex Space and a cozy corner fireplace in the spacious family room. The modern kitchen showcases a breakfast nook, Woodmont Shaker-style 42-in. upper cabinets in White, Silestone countertops and tile backsplash. A downstairs bedroom with full bath downstairs is perfect for overnigh guests. Upstairs, a loft provides space for a study or workout area. The primary suite features an adjoining study and connecting bath that boasts a garden tub and separate shower with tile surround. Additional features include plush carpeting at family room, Flex Space, game room and bedrooms, tile flooring at kitchen, breakfast nook and baths, and Sherwin-Williams zero-VOC interior paint. Entertain family and friends on the covered back patio.

Purchase Price	$ 583,221
Address	6901 Daniel Ranch Drive , Austin, 78744, TX
MLS^® #	9291747
Year Built	2023
Type	Singlefamily
Size	3475 SF
Bedrooms	5
Bathrooms	3

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.	$ 36,000
Total Gross Income	$ 36,000
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.	$ 1,440
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.	$ 34,560	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	$ 3,456	10.00 %
Association fees	$ 5,760	16.67 %
Property tax	$ 6,543	18.93 %
Total Expenses	$ 15,759	45.60 %
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.	$ 18,801	54.40 %

Cash Flow (Year 1)

Net Operating Income	$ 18,801	54.40 %
Annual Debt Service	$ 29,361	84.96 %
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.	$ -10,560	-30.56 %
Income Tax Liability	$ -6,075	-17.58 %
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.	$ -4,485	-12.98 %

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).	45.60 %
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.	130.56 %

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.	$ -934
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.	4.96 %
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	1.00
Annual Depreciation	$ 16,966

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.	-4.42 %
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.	2.90 %
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.	3.22 %
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.	6.17 %
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.	16.20

Financing		% of ARV
Down Payment	$ 233,288	40.00 %
Loan	$ 349,933	60.00 %
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.		60.00 %
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).		60.00 %
Debt Coverage Ratio		0.64

Loan Financing of: Purchase price ($ 583,221)
Type	Amortized
Loan Amount	$ 349,933
Down payment (40%)	$ 233,288
Amortization	30 years
Interest Rate	7.50 %
Monthly Payment	$ 2,446.78

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	36,000	36,720	37,454	38,203	38,968	39,747	40,542	41,353	42,180	43,023
Vacancy Loss	0	1,440	1,469	1,498	1,528	1,559	1,590	1,622	1,654	1,687	1,721
Gross Operating Income	0	34,560	35,251	35,956	36,675	37,409	38,157	38,920	39,699	40,493	41,302
Expenses	0	15,759	16,074	16,396	16,724	17,058	17,399	17,747	18,102	18,464	18,833
Net Operating Income	0	18,801	19,177	19,561	19,952	20,351	20,758	21,173	21,596	22,028	22,469
Loan Payment	0	29,361	29,361	29,361	29,361	29,361	29,361	29,361	29,361	29,361	29,361
Payment Interest Part	0	26,136	25,885	25,615	25,324	25,011	24,673	24,309	23,917	23,495	23,039
Payment Principal Part	0	3,226	3,476	3,746	4,037	4,350	4,688	5,052	5,444	5,867	6,322
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-239,120	-10,560	-10,184	-9,801	-9,410	-9,011	-8,604	-8,188	-7,765	-7,333	-6,892
Depreciation	0	16,966	16,966	16,966	16,966	16,966	16,966	16,966	16,966	16,966	16,966
Taxes	0	-6,075	-5,919	-5,755	-5,585	-5,407	-5,220	-5,026	-4,822	-4,608	-4,384
Cash Flow After Taxes	-239,120	-4,485	-4,266	-4,046	-3,825	-3,604	-3,383	-3,163	-2,943	-2,725	-2,508

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%)	$ 783,800
Cap Rate (3.22%) & NOI	$ 697,793
Gross Rent Multiplier	$ 696,978

Sale Proceeds

Projected Selling Price	$ 783,800
Costs of Sale (6.00%)	$ 47,028
1. Loan Balance Payoff	$ 303,724
Net Sale Proceeds Before Tax	$ 433,048

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	$ 433,048
Investor Cash Outlay	$ 239,120
Net Assets	$ 193,928
Average Yield
Annual Net Assets	$ 19,393
Average Cash Flow (After Taxes)	$ -3,244
Average Annual Gain (After Taxes)	$ 16,149
Average Annual Yield (After Taxes)	2.77 %

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: 6901 Daniel Ranch Drive, Austin RENTAL

Property Report :

6901 Daniel Ranch Drive, Austin, TX 78744

Executive Summary