First time Rental Property Analysis - South Memphis TN

[Presley Balestreri]

Hello, I have been looking at rental properties in Memphis TN area. I have came across a possible property for my first Investment property. I was hoping to get some feedback if the numbers all Look good, This property appears to be a solid property. Tentant is in place Currently M2M since 2021 at $950. Any and all feedback is greatly appreciated! 

BiggerPockets Rental Property Calculator
McKellar Ave
Monthly Income: Monthly Expenses: Monthly Cash Flow: Pro Forma Cap Rate:
$950.00 $658.43 $291.57 8.99%
NOI Total Cash Needed Cash on Cash ROI Purchase Cap Rate
$7,638.00 $14,025.00 24.95% 8.99%
Property Information
Purchase Price: $85,000.00
Purchase Closing Costs: $1,275.00
Estimated Repair Costs: $0.00
Total Cost of Project: $86,275.00
After Repair Value
Down Payment: $12,750.00
Loan Amount: $72,250.00
Loan Points: -
Loan Fees: $0.00
Amortized Over: 30 years
Loan Interest Rate: 4.000%
Monthly P&I: $344.93
Income
Rent $950.00
Total $950.00
Expenses
Electricity $0.00 Gas $0.00
Water & sewer $0.00 HOA fees $0.00
Garbage $0.00 Custom expenses
Vacancy $95.00 Maintenance $47.50
Management $95.00 Insurance $41.00
Property Taxes $35.00 Mortgage Payment $344.93
Total $658.43
Buy & Hold Analysis - 01/09/23 10:05:27
PM Page 1 of 3



Total Initial Equity: -$72,250.00
Gross Rent Multiplier: 7.46
Income-Expense Ratio (2% Rule): 1.10%
Typical Cap Rate: 8.99% Debt Coverage Ratio: 1.85
ARV based on Cap Rate: $85,000.00
50% Rule Cash Flow Estimates
Total Monthly Income: $950.00
x50% for Expenses: $475.00
Monthly Payment/Interest Payment: $344.93
Total Monthly Cash Flow using 50% Rule: $130.07
Analysis Over Time
Annual Growth
Assumptions
2% 2% 2%
Expenses Income Property Value
Year 1 Year 2 Year 5 Year 10 Year 15 Year 20 Year 30
Total Annual Income $11,628 $11,861 $12,587 $13,897 $15,343 $16,940 $20,650
Total Annual Expenses $7,976 $8,053 $8,293 $8,725 $9,202 $9,729 $10,954
Total Annual Cashflow $3,652 $3,807 $4,294 $5,171 $6,141 $7,210 $9,696
Cash on Cash ROI 26.04% 27.15% 30.62% 36.87% 43.78% 51.41% 69.13%
Property Value $86,700 $88,434 $93,847 $103,615 $114,399 $126,306 $153,966
Equity $15,722 $18,781 $28,499 $46,693 $67,767 $92,236 $153,966
Loan Balance $70,978 $69,653 $65,348 $56,921 $46,632 $34,069 $0
Total Profit if Sold $5,349 $12,214 $34,321 $76,583 $126,383 $184,723 $331,821
Annualized Total Return 38% 37% 28% 21% 17% 14% 11%