I am looking at a set of two properties located next to each other. One is a 3 bed 2 bath renting for $855. the second is a duplex property with two 2/1 configurations renting for a combined rate of $1280. I found a lender that will loan 75% of the purchase price, and I could make the deal work, but It would eat up most of my capital reserves. I pulled the property tax assessments from Zillow and they are 11,800 and 16,000 respectively. I am no expert in valuations or appraisals so any help here would be great. The rental amounts are from the current leases.
$2,135.00MONTHLY INCOME
$1,694.08MONTHLY EXPENSES
$440.92MONTHLY CASHFLOW
14.08%PRO FORMA CAP
$9,853.40NOI
$22,125.00TOTAL CASH NEEDED
23.91%CASH ON CASH ROI
13.59%PURCHASE CAP RATE
ExpensesIncome50% Rule
| Total operating expenses: | Mortgage expenses: |
| Vacancy: | $170.80 | Repairs: | $213.50 |
| CapEx: | $106.75 | Electricity: | $50.00 |
| Water & Sewer: | $162.00 | Insurance: | $120.00 |
| Management: | $213.50 | P&I: | $380.20 |
| Property Taxes: | $277.33 |
$72,500PURCHASE PRICE
| Purchase Closing Costs | $2,000.00 |
| Estimated Repairs | $2,000.00 |
| Total Project Cost | $76,500.00 |
| After Repair Value | $70,000.00 |
| Down Payment | $18,125.00 |
| Loan Amount | $54,375.00 |
| Loan Points | $0.00 |
| Amortized Over | 30 years |
| Loan Interest Rate | 7.500% |
| Monthly P&I | $380.20 |
| Total Cash Needed | $22,125.00 |
Financial Info
2.79%
2% RULE $15,625.00TOTAL INITIAL EQUITY
2.83GROSS RENT MULTIPLIER
2.16DEBT COVERAGE RATIO
Analysis Over Time
3% /yearEXPENSE INCREASE
3% /yearINCOME INCREASE
2% /yearPROPERTY VALUE INCREASE
| Year 1 | Year 2 | Year 5 | Year 10 | Year 15 | Year 20 | Year 30 |
|---|
| Total Annual Income | $25,620.00 | $26,388.60 | $28,835.54 | $33,428.29 | $38,752.55 | $44,924.83 | $60,375.21 |
Total Annual Expenses
Operating Expenses
Mortgage Payment | $20,328.97
$15,766.60
$4,562.37 | $20,801.97
$16,239.60
$4,562.37 | $22,307.82
$17,745.45
$4,562.37 | $25,134.21
$20,571.84
$4,562.37 | $28,410.77
$23,848.40
$4,562.37 | $32,209.20
$27,646.83
$4,562.37 | $41,717.40
$37,155.03
$4,562.37 |
| Total Annual Cashflow | $5,291.03 | $5,586.63 | $6,527.71 | $8,294.08 | $10,341.78 | $12,715.62 | $18,657.81 |
| Cash on Cash ROI | 23.91% | 25.25% | 29.50% | 37.49% | 46.74% | 57.47% | 84.33% |
| Property Value | $71,400.00 | $72,828.00 | $77,285.66 | $85,329.61 | $94,210.78 | $104,016.32 | $126,795.31 |
| Equity | $17,526.25 | $19,494.41 | $25,837.43 | $38,134.84 | $53,197.53 | $71,986.64 | $126,795.31 |
| Loan Balance | $53,873.75 | $53,333.59 | $51,448.23 | $47,194.77 | $41,013.25 | $32,029.67 | $0.00 |
| Total Profit if Sold * | -$1,449.73 | $6,062.22 | $30,895.02 | $80,784.39 | $143,073.13 | $220,258.21 | $432,774.81 |
| Annualized Total Return | -6.55% | 12.87% | 19.10% | 16.62% | 14.34% | 12.71% | 10.60% |
