ABCDEFGHIJKLNOPQRSTUVWXYZ
1
Should You Sell?
2
3
Note: Inputs are items in blue
Tax Calculations
4
Old Investment Assumptions
INPUTSAge6.67
5
Original Property Basis
 5,000,000 Land Cost 1,250,000
6
Land %25%
Personal Property Cost
 25,000
7
Personal Property %0.50%
Personal Property A/D
 (25,000)(Assumes SL over 5 years)
8
Acquisition Date2/1/2014Building Cost 3,725,000
9
NOI 550,000 Building A/D (903,482)(Assumes SL over 27.5 years)
10
Sale Cap Rate (Today)
5.50%Total Cost Basis 4,071,518
11
Transaction Costs4.00%
12
Current Debt Payoff 3,348,000 Proceeds 10,000,000
13
Current Annual Debt Service
 241,572 Cost basis (4,071,518)
14
Current Interest Rate5.00%Closing Costs (400,000)
15
Sale Date9/30/2020Total Gain 5,528,482
16
Like Kind Exchange?(drop down box)No
17
Subject to NIIT?(drop down box)Yes
18
Ordinary Tax Rate37.00%
19
GainTax
20
New Investment Assumptions
Tax at Ordinary 25,000 9,250
21
Leverage on Purchase
70%Tax @ 25% 903,482 225,870
22
Purchase Price 16,289,324 Tax @ 20% 4,600,000 920,000
23
Cap Rate5.50%NIIT @ 3.8% 5,528,482 210,082
24
NOI 895,913 TOTAL Tax on Sale of Original Investment Investment (Yr 1) 1,365,203
25
New Debt Balance 11,402,527
26
New Debt Interest Rate
3.25%
27
New Debt Amortization Term
 30 Investment Analysis
28
New Debt Annual Debt Service
$595,494
29
Hold Period (In Years)
7
Comparison assuming hold period of 7 years (ignores tax consequences)
30
NOI Growth3.00%Old Investment
31
Exit Cap Rate (Future)
6.00%
NOI (at end of hold period)
 676,431
32
Cap Rate (at exit)6.00%
33
Cash Flow AnalysisValue 11,273,844
34
Pre-Sale Cash FlowClosing Costs (450,954)
35
Pre-Sale NOI 550,000 Debt Principal (2,744,091)
36
Pre-Sale Debt Service
 (241,572)Liquidation Proceeds 8,078,799
37
Pre-Sale Cash Flow 308,428
Cash Flow Over Hold Period
 2,523,350
38
Less Capex Over Hold Period
 (300,000)
39
Net Proceeds on Sale
Total Value Over Hold Period
 10,302,149
40
Proceeds 10,000,000
41
Debt Payoff (3,348,000)New Investment
42
Closing Costs (400,000)
NOI (at end of hold period)
 1,101,860
43
Tax on Sale (1,365,203)Cap Rate (at exit)6.00%
44
Net Proceeds 4,886,797 Value 18,364,330
45
Closing Costs (734,573)
46
Sources on Purchase
Debt Principal (9,666,050)
47
Equity 4,886,797 Liquidation Proceeds 7,963,707
48
Debt 11,402,527
Cash Flow Over Hold Period
 2,696,439
49
Purchase Price 16,289,324
Less Capex Over Hold Period
 (1,500,000)
50
Total Value Over Hold Period
 9,160,146
51
Post-Sale NOI
52
Pre-Sale Cash Flow 308,428
Value of New Investment
 (1,142,004)
53
Debt Service on Purchase
 595,494 Note: This illustration is for discussion purposes only and should not be relied on for tax or investment advice. A competent professional should be consulted on any transaction.
54
Post-Sale NOI Required
 903,922
55
Cap Rate Required to Match Pre-Sale Cash Flow
5.55%
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100