ABCDEFGHIJKLMNOPQR
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Acquisition Information
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Purchase Price$ 1,500,000
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Down payment (100% if cash purchase)
20% $ 300,000
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Mortgage Amount$ 1,200,000
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Closing Costs / Inspection / Etc.
$ 7,000
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Rehabilitation/ Improvements
$ 1,000
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Total Cash out of Pocket
$ 308,000
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ANNUAL RENT / EXPENSE INCREASE
5.00 %Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9
Year 10
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Monthly Rent$ 6,000 72,000 75,600 79,380 83,349 87,516 91,892 96,487 101,311 106,377 111,696
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Vacancy & Collection Loss
3.00 % 2,160 2,268 2,381 2,500 2,625 2,757 2,895 3,039 3,191 3,351
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Effective Annual Rent
69,840 73,332 76,999 80,849 84,891 89,136 93,592 98,272 103,185 108,345
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Management 8.00
% of Effective Annual Rent
5,587 5,867 6,160 6,468 6,791 7,131 7,487 7,862 8,255 8,668
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Insurance$ 4,000
annual premium
4,000 4,200 4,410 4,631 4,862 5,105 5,360 5,628 5,910 6,205
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Maintenance / Repairs / Other
2.50
% of Gross Rent
1,800 1,890 1,985 2,084 2,188 2,297 2,412 2,533 2,659 2,792
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HOA$ 0 Monthly 0 0 0 0 0 0 0 0 0 0
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Property Tax$ 4,219 Annual 4,219 4,430 4,651 4,884 5,128 5,385 5,654 5,937 6,233 6,545
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Miscellaneous$ 50 Monthly 600 630 662 695 729 766 804 844 886 931
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Total Operating Expenses
16,206 17,017 17,867 18,761 19,699 20,684 21,718 22,804 23,944 25,141
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Net Operating Income
53,634 56,315 59,131 62,088 65,192 68,452 71,874 75,468 79,242 83,204
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Mortgage Payment and Cash Flows
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Interest Rate 4.25 %
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Loan Term 30 Years
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Monthly Payment
$5,903.28
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Annual Debt Service (Principal & Interest)
70,839 70,839 70,839 70,839 70,839 70,839 70,839 70,839 70,839 70,839
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Cash Flow(17,206)(14,524)(11,708)(8,752)(5,647)(2,388) 1,035 4,629 8,402 12,364
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Cash on Cash Return
(5.59%)(4.72%)(3.80%)(2.84%)(1.83%)(0.78%)0.34% 1.50% 2.73% 4.01%
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Principal Paydown during the year
20,230 21,107 22,022 22,976 23,972 25,011 26,095 27,226 28,406 29,637
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Cash Flow + Principal Paydown
3,025 6,583 10,314 14,225 18,325 22,623 27,130 31,854 36,808 42,001
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Cash on Cash Return Incl. Principal Paydown
0.98% 2.14% 3.35% 4.62% 5.95% 7.35% 8.81% 10.34% 11.95% 13.64%
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Property Value 5.00
% annual increase
1,575,000 1,653,750 1,736,438 1,823,259 1,914,422 2,010,143 2,110,651 2,216,183 2,326,992 2,443,342
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Loan Balance 1,179,770 1,158,662 1,136,641 1,113,664 1,089,692 1,064,681 1,038,587 1,011,361 982,955 953,319
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Equity in Property 395,230 495,088 599,797 709,595 824,730 945,462 1,072,064 1,204,822 1,344,037 1,490,023
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IRR and Summary of Cash Flows
InitialYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10
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Initial Investment, net
(308,000)
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Cash Flow(17,206)(14,524)(11,708)(8,752)(5,647)(2,388) 1,035 4,629 8,402 12,364
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Sale Proceeds 2,443,342
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Sale Costs (commissions, etc.)
6.00
% of sale price
(146,601)
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Repay Loan(953,319)
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Net Cash Flow(308,000)(17,206)(14,524)(11,708)(8,752)(5,647)(2,388) 1,035 4,629 8,402 1,355,787
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IRR of Investment
14.62%
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