Property Report Hampton 6 Unit Presented by: Ron J. Parasole Jr. 1738 Brick ave Scranton, Pa 18508 Office: Mobile: (570) 903-8969 Fax: (570) 209-7753 www.realestatetools.com 2010-2014 Real Estate Tools 1
Overview Hampton 6 Unit Purchase Info Total Number of Units 6 Initial Market Value $231,000 Purchase Price $222,000 Initial Cash Invested $59,940 Income Analysis Monthly Annual Net Operating Income $2,156 $25,873 Cash Flow $1,158 $13,894 Financial Metrics Cap Rate (Purchase Price) 11.7% Cash on Cash Return (Year 1) 23.2% Internal Rate of Return (Year 10) 30.2% Sale Price (Year 10) $310,445 Great income producing property with two separate buildings on one deed next to a school in Scranton's Westside. This is a fully rented apartment with great rental history. The front building is a duplex, two three-bedroom units and in the back there is a four unit building which has three one bedrooms and one two-bedroom apartments. Here's a video of the rear bottom left one bedroom apartment. If this link is not clickable please copy and paste onto your address bar to view this video on YouTube http://youtu.be/zuntd3zmv2c www.realestatetools.com 2010-2014 Real Estate Tools 2
Purchase Analysis Purchase Info Initial Market Value $231,000 Purchase Price $222,000 - First Mortgage ($166,500) - Second Mortgage ($0) = Downpayment $55,500 + Buying Costs $4,440 + Initial Improvements $0 = Initial Cash Invested $59,940 Total Number of Units 6 Cost per Unit $37,000 Average Monthly Rent per Unit $524 Mortgages First Second Loan-To-Cost Ratio 75% 0% Loan-To-Value Ratio 72.08% 0% Loan Amount $166,500 $0 Loan Type Amortizing Term 30 Years Interest Rate 6% Payment $998.25 $0.00 Income Monthly Annual Gross Rent $3,141 $37,692 Vacancy Loss ($31) ($377) Operating Income $3,110 $37,315 Expenses (% of Income) Monthly Annual Cleaning & Maintenance (5%) ($148) ($1,776) Insurance (3%) ($100) ($1,200) Management Fees (8%) ($249) ($2,985) Taxes (8%) ($234) ($2,806) Sewer (5%) ($142) ($1,706) Trash (3%) ($81) ($969) Operating Expenses (31%) ($954) ($11,442) Net Performance Monthly Annual Net Operating Income $2,156 $25,873 - Mortgage Payments ($998) ($11,979) - Year 1 Improvements ($0) ($0) = Cash Flow $1,158 $13,894 Financial Metrics (Year 1) Annual Gross Rent Multiplier 5.9 Operating Expense Ratio 30.7% Debt Coverage Ratio 2.16 Cap Rate (Purchase Price) 11.7% Cash on Cash Return 23.2% Assumptions Appreciation Rate 3.0% Vacancy Rate 1.0% Income Inflation Rate 3.0% Expense Inflation Rate 3.0% LTV for Refinance 70.0% Selling Costs $16,170 www.realestatetools.com 2010-2014 Real Estate Tools 3
Buy and Hold Projection Income Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Gross Rent $37,692 $38,823 $39,987 $42,423 $49,180 $66,093 $88,824 Vacancy Loss ($377) ($388) ($400) ($424) ($492) ($661) ($888) Operating Income $37,315 $38,435 $39,588 $41,998 $48,688 $65,432 $87,935 Expenses Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Cleaning & Maintenance ($1,776) ($1,829) ($1,884) ($1,999) ($2,317) ($3,114) ($4,185) Insurance ($1,200) ($1,236) ($1,273) ($1,351) ($1,566) ($2,104) ($2,828) Management Fees ($2,985) ($3,075) ($3,167) ($3,360) ($3,895) ($5,235) ($7,035) Taxes ($2,806) ($2,890) ($2,977) ($3,158) ($3,661) ($4,920) ($6,613) Sewer ($1,706) ($1,757) ($1,810) ($1,920) ($2,226) ($2,991) ($4,020) Trash ($969) ($998) ($1,028) ($1,091) ($1,264) ($1,699) ($2,284) Operating Expenses ($11,442) ($11,785) ($12,139) ($12,878) ($14,929) ($20,064) ($26,964) Income Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Net Operating Income $25,873 $26,649 $27,449 $29,120 $33,758 $45,368 $60,971 - Mortgage Payments ($11,979) ($11,979) ($11,979) ($11,979) ($11,979) ($11,979) ($11,979) - Improvements ($0) ($0) ($0) ($0) ($0) ($0) ($0) = Cash Flow $13,894 $14,670 $15,470 $17,141 $21,779 $33,389 $48,992 Cap Rate (Purchase Price) 11.7% 12.0% 12.4% 13.1% 15.2% 20.4% 27.5% Cap Rate (Market Value) 10.9% 10.9% 10.9% 10.9% 10.9% 10.9% 10.9% Cash on Cash Return 23.2% 24.5% 25.8% 28.6% 36.3% 55.7% 81.7% Return on Equity 18.9% 17.7% 16.7% 15.2% 12.7% 10.2% 8.7% Loan Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Market Value $237,930 $245,068 $252,420 $267,792 $310,445 $417,212 $560,698 - Loan Balance ($164,455) ($162,285) ($159,980) ($154,936) ($139,337) ($89,917) ($1) = Equity $73,475 $82,783 $92,440 $112,857 $171,108 $327,295 $560,696 Loan-to-Value Ratio 69.1% 66.2% 63.4% 57.9% 44.9% 21.6% 0.0% Potential Cash-Out Refi $2,096 $9,263 $16,714 $32,519 $77,974 $202,132 $392,487 Sale Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Equity $73,475 $82,783 $92,440 $112,857 $171,108 $327,295 $560,696 - Selling Costs ($16,655) ($17,155) ($17,669) ($18,745) ($21,731) ($29,205) ($39,249) = Proceeds After Sale $56,820 $65,629 $74,771 $94,111 $149,377 $298,090 $521,447 + Cumulative Cash Flow $13,894 $28,564 $44,033 $77,468 $176,814 $455,634 $871,543 - Initial Cash Invested ($59,940) ($59,940) ($59,940) ($59,940) ($59,940) ($59,940) ($59,940) = Net Profit $10,773 $34,252 $58,864 $111,639 $266,250 $693,784 $1,333,050 Internal Rate of Return 18.0% 27.9% 30.4% 31.3% 30.2% 28.7% 28.4% Return on Investment 18% 57% 98% 186% 444% 1,157% 2,224% www.realestatetools.com 2010-2014 Real Estate Tools 4
Graphs Monthly Cash Flow $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 0 5 10 15 Year 20 25 30 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 Loan Balance + Equity = Market Value $0 0 5 10 15 Year 20 25 30 Internal Rate of Return (IRR) 30% 25% 20% 15% 10% 5% 0% 0 5 10 15 Year 20 25 30 www.realestatetools.com 2010-2014 Real Estate Tools 5
Rent Roll Unit Description Square Feet Units of This Type Rent (Per Unit) 1129 Front - 3 Bed 0 1 $616 Per Month 1129 Rear 1-2 Bed 0 1 $475 Per Month 1129 Rear 2-2 Bed 0 1 $475 Per Month 1131 Front - 3 Bed 0 1 $635 Per Month 1131 Rear 1-2 Bed 0 1 $440 Per Month 1131 Rear 2-3 Bed 0 1 $500 Per Month Totals for Year 1 Total Number of Units 6 Total Area (Sum of Units) 0 Square Feet Total Rent (Sum of Units) $3,141 Per Month, $37,692 Per Year www.realestatetools.com 2010-2014 Real Estate Tools 6
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