Scribd
Upload
48 views2 pages

Investment Analysis for 3-Unit Property

This 3 unit property needs renovations such as new paint, drywall work, flooring, appliances and electrical rewiring. It has a large second floor unit and includes water heating. The monthly rent from the 3 units is $1,500 each, bringing in $54,000 annually in potential rent. However, operating expenses are $13,608 per year, leaving a net operating income of $37,692. At a cap rate of 8.77%, the estimated value of the property is $418,800.

Uploaded by

api-28625429
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
48 views2 pages

Investment Analysis for 3-Unit Property

This 3 unit property needs renovations such as new paint, drywall work, flooring, appliances and electrical rewiring. It has a large second floor unit and includes water heating. The monthly rent from the 3 units is $1,500 each, bringing in $54,000 annually in potential rent. However, operating expenses are $13,608 per year, leaving a net operating income of $37,692. At a cap rate of 8.77%, the estimated value of the property is $418,800.

Uploaded by

api-28625429
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd

1 car garage, very large 2nd floor unit.

N
boilers, include hot water. Heating syste
Property Name
makes noise. Needs paint and dry wall w
Current 10 Year Property Needs to be rewired for new electrical sy
TreasuryStock
Current Bond Yield 3.83% Address: 1234 Somewhere
Downstairs Lane updating. Needs
bath needs
Market Returns 6.00% Property Type: kitchen
3 Unit appliances. Needs new floor cov
Details: on the third floor.

List Price $399,000


Purchase Price $430,000
Down Payment $15,050
Closing Costs $7,525
Cash In $15,050

Potential Revenue Vacancy &


# of Units Mnthly Rent Annual Credit Loss (%) Income
3 $1,500 $54,000 5 51300
Other
Laundry $0 $0 0 0
Parking $0 $0 0 0
etc $0 $0 0 0

Total Gross Operating Income: 51300

Debt Service
First Mortgage Important Calculations
(plus rehab money, Acceptable Cap Rate 9.00%
$45k) $414,950 NOI (Net Operating Income) $37,692
Annual Amount $28,805 Cap Rate 8.77%
Term
Base(months)
Monthly 360 Value of the Property $418,800
Amount $2,227.54 Total Gross Operating Income $51,300
PMI $172.90 Total Gross Income $54,000
Total Operating
Monthly Amount $2,400.44 Expenses
Monthlyw/
Monthly w/Tx
Taxes
and $2,744.44 percentage of Total
Ins $2,834.44 Total
GrossOperating
OperatingExpenses $13,608
Rate 5.00% Income 26.53%
Second Mortgage $0
Annual Amount $0
Term (months) 360
Monthly Amount $0
Rate 6.00%

Cash Flow Calculations


Total of monthly mortgage payments for
Total Annual Debt Service $28,805 first
NOI and
Should second
- Total
be Annual
15% Debt Service
or higher. Annual(before
cash
Cash Flow $8,887 flow
taxes)
before taxes / (down payment + any
Cash-on-Cash Return 59.05% Should
other up-front
be 1.2 expenses)
or higher. Net Operating
Debt Coverage Ratio (DCR) 1.31 Monthly
Income /rents
Annual Debt Operating
- (Total Service
Approximate
Operating Monthly Cash Flow
+ Debt $965.56 Expeses/12 + Monthly Debt Service)
Service $3,534.44
very large 2nd floor unit. New
e hot water. Heating system
Needs paint and dry wall work.
ewired for new electrical system.
hereneeds
ath Lane updating. Needs new
nces. Needs new floor coverings
oor.
Operating Expenses

Annual Cost

Taxes $4,128
Insurance $1,080
Electricity / Gas $1,000
Water & Sewer $1,200
Trash Removal
Landscaping / Snow $400
Removal $1,000
Advertising $300
Repairs and Maint $2,500
Supplies $500
Accounting $500
Legal $1,000
Other $0
$0
Total Operating
Expenses $13,608

nt Calculations
Should
total be more
gross than income
operating 8 - total operating
expenses
NOI / Price, should be 7 to 12%
NOI / Acceptable Cap Rate
Total Gross Income - Vacancy and Credit Loss
All rents and other incomes (laundry, etc)

Typically 30 to 50%.
Expense
Should notto be
operate
over property
50%.

You might also like