9780 Windy Ridge Rd, Frisco TX 75033

9780 Windy Ridge Rd, Frisco, TX 75033

Condominium: 2 bedrooms , 1 bathroom

Year built: 1984, Size: 1122 SF

Investment strategy: Rental Property

Purchase Price$ 219,000

Rent$ 1,375/mo

Monthly Cash Flow$ -142

Cash on Cash Return-3.90 %

Financial Analysis

Cash on Cash Return	-3.90 %
Internal Rate of Return (IRR)	6.26 %
Capitalization Rate	3.80 %
Gross Rent Multiplier (GRM)	13.27
Debt-coverage Ratio (DCR)	0.83
Operating Expense Ratio (OER)	43.91 %

Financial Breakdown

Purchase Price	$ 219,000
Purchase Costs	$ 0
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).	$ 219,000
Financing	$ 175,200
Total Cash Needed Cash out of Pocket Shows rehabber's cash outlay. Cash out of Pocket Shows rehabber's cash outlay.	$ 43,800
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.	$ 43,800
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.	$ 0

Operating Analysis

Rent	$ 1,375/mo
Gross Operating Income (GOI)	$ 14,850
Total Expenses	$ 6,521
Net Operating Income (NOI)	$ 8,329
Annual Debt Service	$ 10,037
Cash Flow Before Taxes (CFBT)	$ -1,708
Income Tax Liability	$ -2,497
Cash Flow After Taxes (CFAT)	$ 789

Great Investment home in middle of Frisco, or a starter home for any family who wants an excellent location, close to shopping, restaurants and Preston rd. in Frisco. Per seller, new stove 2020, new tile flooring in bedrooms and bathroom 2020, Exterior trim painted August 2020. Refrigerator stays with home.Previously leased out for $1, 325. a month

Purchase Price	$ 219,000
Address	9780 Windy Ridge Rd , Frisco, 75033, TX
MLS^® #	14639917
Listing Agent	The Tom May Team
Listing Broker	Re/Max Dallas Suburbs
Year Built	1984
Type	Condominium
Size	1122 SF
Bedrooms	2
Bathrooms	1

Property History

Date	Price	Change	Event
5/15/2020

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.	$ 16,500
Total Gross Income	$ 16,500
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.	$ 1,650
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.	$ 14,850	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	$ 948	6.38 %
Property tax	$ 3,521	23.71 %
Insurance	$ 2,052	13.82 %
Total Expenses	$ 6,521	43.91 %
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.	$ 8,329	56.09 %

Cash Flow (Year 1)

Net Operating Income	$ 8,329	56.09 %
Annual Debt Service	$ 10,037	67.59 %
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.	$ -1,708	-11.50 %
Income Tax Liability	$ -2,497	-16.81 %
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.	$ 789	5.31 %

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).	43.91 %
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.	111.50 %

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.	$ 17,945
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.	6.26 %
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	1.41
Annual Depreciation	$ 6,371

Holding period of 30 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.	-3.90 %
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.	1.10 %
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.	3.80 %
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.	7.53 %
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.	13.27

Financing
Down Payment		$ 43,800
30y		$ 175,200
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		0.83

30y Financing of: Purchase price ($ 219,000)
Type	Amortized
Loan Amount	$ 175,200
Down payment (20%)	$ 43,800
Amortization	30 years
Interest Rate	4.00 %
Monthly Payment	$ 836.43

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	11	12	13	14	15	16	17	18	19	20	21	22	23	24	25	26	27	28	29	30
Operational Analysis
Gross Scheduled Income	0	16,500	16,665	16,832	17,000	17,170	17,342	17,515	17,690	17,867	18,046	18,226	18,409	18,593	18,779	18,966	19,156	19,348	19,541	19,736	19,934	20,133	20,334	20,538	20,743	20,951	21,160	21,372	21,585	21,801	22,019
Vacancy Loss	0	1,650	1,667	1,683	1,700	1,717	1,734	1,752	1,769	1,787	1,805	1,823	1,841	1,859	1,878	1,897	1,916	1,935	1,954	1,974	1,993	2,013	2,033	2,054	2,074	2,095	2,116	2,137	2,159	2,180	2,202
Gross Operating Income	0	14,850	14,999	15,148	15,300	15,453	15,608	15,764	15,921	16,080	16,241	16,404	16,568	16,733	16,901	17,070	17,240	17,413	17,587	17,763	17,940	18,120	18,301	18,484	18,669	18,856	19,044	19,235	19,427	19,621	19,817
Expenses	0	6,521	6,651	6,784	6,920	7,059	7,200	7,344	7,491	7,640	7,793	7,949	8,108	8,270	8,436	8,604	8,776	8,952	9,131	9,314	9,500	9,690	9,884	10,081	10,283	10,489	10,698	10,912	11,131	11,353	11,580
Net Operating Income	0	8,329	8,347	8,364	8,380	8,394	8,408	8,420	8,431	8,440	8,448	8,455	8,460	8,463	8,465	8,465	8,464	8,461	8,456	8,449	8,441	8,430	8,417	8,403	8,386	8,367	8,346	8,322	8,296	8,268	8,237
Loan Payment	0	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037	10,037
Payment Interest Part	0	6,952	6,826	6,695	6,559	6,417	6,270	6,117	5,957	5,791	5,618	5,437	5,250	5,055	4,852	4,641	4,421	4,192	3,954	3,706	3,448	3,180	2,900	2,610	2,307	1,992	1,664	1,323	968	599	214
Payment Principal Part	0	3,085	3,211	3,342	3,478	3,620	3,767	3,921	4,080	4,247	4,420	4,600	4,787	4,982	5,185	5,396	5,616	5,845	6,083	6,331	6,589	6,857	7,137	7,428	7,730	8,045	8,373	8,714	9,069	9,439	9,823
Cash Flow
Repairs/Construction	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0
Cash Flow Before Taxes	-43,800	-1,708	-1,690	-1,673	-1,657	-1,643	-1,629	-1,617	-1,607	-1,597	-1,589	-1,583	-1,578	-1,574	-1,572	-1,572	-1,573	-1,576	-1,581	-1,588	-1,597	-1,607	-1,620	-1,634	-1,651	-1,670	-1,691	-1,715	-1,741	-1,769	-1,800
Depreciation	0	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371	6,371
Taxes	0	-2,497	-2,425	-2,351	-2,275	-2,197	-2,117	-2,034	-1,949	-1,861	-1,770	-1,677	-1,581	-1,481	-1,379	-1,273	-1,164	-1,051	-935	-814	-689	-560	-427	-289	-146	2	155	314	479	649	826
Cash Flow After Taxes	-43,800	789	735	678	618	554	487	417	342	264	181	94	3	-93	-193	-299	-409	-525	-647	-774	-907	-1,047	-1,193	-1,346	-1,505	-1,672	-1,847	-2,029	-2,219	-2,418	-2,626

Note: All amounts in the table above are in $

Resale Price Evaluation Methods

The property is sold after 30 years. Below is the resale price calculated using different methods.

Appreciation (1.00%)	$ 295,179
Cap Rate (3.80%) & NOI	$ 216,766
Gross Rent Multiplier	$ 292,196

Sale Proceeds

Projected Selling Price	$ 295,179
Costs of Sale (6.00%)	$ 17,711
Net Sale Proceeds Before Tax	$ 277,468

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	$ 277,468
Investor Cash Outlay	$ 43,800
Net Assets	$ 233,668
Average Yield
Annual Net Assets	$ 7,789
Average Cash Flow (After Taxes)	$ -465
Average Annual Gain (After Taxes)	$ 7,324
Average Annual Yield (After Taxes)	3.34 %

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: 9780 Windy Ridge Rd, Frisco RENTAL

Property Report :

9780 Windy Ridge Rd, Frisco, TX 75033

Executive Summary