10 unit building composed of 1 bedroom units renting for
$450.00 per month each
PRICE AND FINANCING AT 5.5 GROSS RENTAL INCOME
| ORIGINAL PURCHASE PRICE |
300,000 |
100% |
5.5 X Annual Rental Income |
| Down Payment was |
45,000 |
15% |
|
| Loans: @9% amortized 30 years |
255,000 |
85% |
65% 1st.TD, 20% seller 2ndTD |
|
OPERATING STATEMENT |
| Annual Gross Rental Income |
54,500 |
100% |
|
| Less: expenses including mgt. |
21,800 |
40% |
|
| NET OPERATING INCOME |
32,700 |
60% |
|
| Less: Loan Payments |
24,620 |
|
| NET CASH FLOW |
8,078 |
18% cash on cash with $45,000
down payment |
|
INVESTMENT RECAP |
| NET CASH FLOW |
8,078 |
|
| Plus: 1st. yr. mortgage reduction |
1,742 |
|
| Plus: tax savings - depreciation |
2,290 |
assume 35% Fed & State tax rate |
| 1st. yr. After Tax Yield on Equity |
12,110 |
27% on cash |
|
5 more years....
FIFTH YEAR PROJECTION - INCOME AND EXPENSES BOTH RISE 3%
PER YEAR
| PROJECTED VALUE |
347,700 |
100% |
3% yearly rent increase X 5.5 rent multiplier
=$47,400 increase in value plus $10,506 principal reduction=$58,206 equity
increase |
| Loan balance |
244,494 |
70% |
| Equity ($45,000 + $58,206) |
103,206 |
30% |
|
FIFTH YEAR OPERATING STATEMENT |
| Annual Gross Rental Income |
63,180 |
100% |
increased 3% per year |
| Less: expenses including mgt. |
25,272 |
40% |
increased 3% per year |
| NET OPERATING INCOME |
37,900 |
60% |
increased 16% over 5 years |
| Less: Loan Payments |
24,620 |
Payment remains constant |
| NET CASH FLOW |
13,280 |
30% on cash |
increased 64% over 5 years |
|
FIFTH YEAR INVESTMENT RECAP |
| NET CASH FLOW |
13,280 |
|
| Plus: 5th year mortgage reduction |
2,490 |
|
| tax savings |
2,290 |
remains constant |
assume 35% Fed & State tax rate |
| 5th year After Tax Yield on Equity |
18,000 |
40% on cash |
increased 49% over 5 years |
Economic Models
310-493-1999 Staff@SafariRealtors.com
Safari Group Keller Williams Beach Cities
1601 Pacific Coast Highway #265
Hermosa Beach CA, 90254
|
