712 S Willis St, Stillwater OK 74074

712 S Willis St, Stillwater, OK 74074

Singlefamily: 3 bedrooms , 2 bathrooms

Year built: 1968, Size: 1618 SF

Investment strategy: Rental Property

Purchase Price$ 195,000

Rent$ 1,500/mo

Monthly Cash Flow$ 243

Cash on Cash Return7.01 %

Financial Analysis

Cash on Cash Return	7.01 %
Internal Rate of Return (IRR)	17.09 %
Capitalization Rate	5.54 %
Gross Rent Multiplier (GRM)	10.83
Debt-coverage Ratio (DCR)	1.37
Operating Expense Ratio (OER)	36.82 %

Financial Breakdown

Purchase Price	$ 195,000
Purchase Costs	$ 2,500
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).	$ 197,500
Financing	$ 156,000
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 41,500
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.	$ 39,000
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.	$ 2,500

Operating Analysis

Rent	$ 1,500/mo
Gross Operating Income (GOI)	$ 17,100
Total Expenses	$ 6,297
Net Operating Income (NOI)	$ 10,803
Annual Debt Service	$ 7,892
Cash Flow Before Taxes (CFBT)	$ 2,911
Income Tax Liability	$ 124
Cash Flow After Taxes (CFAT)	$ 2,787

Close to OSU and move-in ready! The interior has been freshly painted and features an updated kitchen and bathrooms. There are two separate living areas, one with a fireplace and both have access to the kitchen and have wood-look tile allowing for easy maintenance. All three bedrooms are generous sized. The laundry room off the kitchen has a large closet for storage or pantry space. Washer, Dryer and Refrigerator stay with the home but are no longer under warranty.

Purchase Price	$ 195,000
Address	712 S Willis St , Stillwater, 74074, OK
MLS^® #	123940
Listing Agent	Ann Morgan
Listing Broker	Real Estate Professionals
Year Built	1968
Type	Singlefamily
Size	1618 SF
Bedrooms	3
Bathrooms	2

Property History

Date	Price	Change	Event
5/9/2018
4/18/2014
6/11/2007
9/6/1989

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.	$ 18,000
Total Gross Income	$ 18,000
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.	$ 900
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.	$ 17,100	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	$ 1,710	10.00 %
Repairs	$ 855	5.00 %
Property tax	$ 855	5.00 %
Property tax	$ 1,785	10.44 %
Insurance	$ 1,092	6.39 %
Total Expenses	$ 6,297	36.82 %
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.	$ 10,803	63.18 %

Cash Flow (Year 1)

Net Operating Income	$ 10,803	63.18 %
Annual Debt Service	$ 7,892	46.15 %
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.	$ 2,911	17.02 %
Income Tax Liability	$ 124	0.72 %
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.	$ 2,787	16.30 %

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).	36.82 %
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.	82.98 %

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.	$ 62,998
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.	17.09 %
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	2.52
Annual Depreciation	$ 5,673

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.	7.01 %
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.	21.11 %
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.	5.54 %
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.	9.23 %
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.	10.83

Financing
Down Payment		$ 39,000
Loan		$ 156,000
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		1.37

Loan Financing of: Purchase price ($ 195,000)
Type	Amortized
Loan Amount	$ 156,000
Down payment (20%)	$ 39,000
Amortization	30 years
Interest Rate	3.00 %
Monthly Payment	$ 657.70

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	18,000	18,360	18,727	19,102	19,484	19,873	20,271	20,676	21,090	21,512
Vacancy Loss	0	900	918	936	955	974	994	1,014	1,034	1,054	1,076
Gross Operating Income	0	17,100	17,442	17,791	18,147	18,510	18,880	19,257	19,643	20,035	20,436
Expenses	0	6,297	6,423	6,551	6,682	6,816	6,952	7,091	7,233	7,378	7,526
Net Operating Income	0	10,803	11,019	11,239	11,464	11,694	11,927	12,166	12,409	12,657	12,911
Loan Payment	0	7,892	7,892	7,892	7,892	7,892	7,892	7,892	7,892	7,892	7,892
Payment Interest Part	0	4,635	4,536	4,434	4,329	4,221	4,109	3,994	3,875	3,753	3,627
Payment Principal Part	0	3,257	3,356	3,458	3,563	3,672	3,783	3,898	4,017	4,139	4,265
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-41,500	2,911	3,127	3,347	3,572	3,801	4,035	4,274	4,517	4,765	5,018
Depreciation	0	5,673	5,673	5,673	5,673	5,673	5,673	5,673	5,673	5,673	5,673
Taxes	0	124	202	283	366	450	536	625	715	808	903
Cash Flow After Taxes	-41,500	2,787	2,924	3,064	3,206	3,351	3,499	3,649	3,802	3,957	4,116

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%)	$ 262,064
Cap Rate (5.54%) & NOI	$ 233,043
Gross Rent Multiplier	$ 232,971

Sale Proceeds

Projected Selling Price	$ 262,064
Costs of Sale (6.00%)	$ 15,724
1. Loan Balance Payoff	$ 118,591
Net Sale Proceeds Before Tax	$ 127,749

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	$ 127,749
Investor Cash Outlay	$ 41,500
Net Assets	$ 86,249
Average Yield
Annual Net Assets	$ 8,625
Average Cash Flow (After Taxes)	$ 3,024
Average Annual Gain (After Taxes)	$ 11,649
Average Annual Yield (After Taxes)	5.97 %

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: 712 S Willis St, Stillwater RENTAL

Property Report :

712 S Willis St, Stillwater, OK 74074

Executive Summary