Property Report The Village at Centre Point 8-Plex Presented by: RE/MAX Equity/Silvercreek Realty 295 W Center St Suite A/1099 S Wells St #200 Provo/Meridian, UT/ID 84601/83642 Mobile: FIG Disclaimer: * No investments are guaranteed to result in profits. Net operating income, cap rates, and internal rates of return are subject to fluctuation and may experience a wide range of change, including the potential for operating losses. Factors affecting investment returns include, without limitation, changes in interest rates, tenant vacancies and defaults, property management expenses, repair and maintenance costs, HOA expenses, litigation, insurance rates, and relative strength and weakness in the local and regional economy. Past performance is not a guarantee of future returns. FIG does not provide tax or legal advice, and none of the 1
Overview The Village at Centre Point 8-Plex Purchase Info Square Feet (8 Units) 14,400 Initial Market Value $1,550,000 Purchase Price $1,320,000 Initial Cash Invested $384,000 Income Analysis Monthly Annual Net Operating Income $7,242 $86,903 Cash Flow $1,775 $21,301 Financial Metrics Cap Rate (Purchase Price) 6.6% Cash on Cash Return (Year 1) 5.5% Internal Rate of Return (Year 10) 15.5% Sale Price (Year 10) $1,984,131 2
Purchase Analysis Purchase Info Initial Market Value $1,550,000 Purchase Price $1,320,000 - First Mortgage -$990,000 - Second Mortgage -$0 = Downpayment $330,000 + Buying Costs $54,000 + Initial Improvements $0 = Initial Cash Invested $384,000 Square Feet (8 Units) 14,400 Cost per Square Foot $92 Monthly Rent per Square Foot $0.74 Cost per Unit $165,000 Average Monthly Rent per Unit $1,325 Mortgages First Second Loan-To-Cost Ratio 75% 0% Loan-To-Value Ratio 63.87% 0% Loan Amount $990,000 $0 Loan Type Amortizing Term 30 Years Interest Rate 5.25% Payment $5,466.82 $0.00 Income Monthly Annual Gross Rent $10,600 $127,200 Vacancy Loss -$318 -$3,816 Technology Package $600 $7,200 Operating Income $10,882 $130,584 Expenses (% of Income) Monthly Annual Cleaning & Maintenance (1%) -$150 -$1,800 Insurance (1%) -$108 -$1,300 Management Fees (7%) -$762 -$9,141 Taxes (12%) -$1,260 -$15,120 Association Fees (12%) -$1,360 -$16,320 Operating Expenses (33%) -$3,640 -$43,681 Net Performance Monthly Annual Net Operating Income $7,242 $86,903 - Mortgage Payments -$5,467 -$65,602 - Year 1 Improvements -$0 -$0 = Cash Flow $1,775 $21,301 Financial Metrics (Year 1) Annual Gross Rent Multiplier 10.4 Operating Expense Ratio 33.5% Debt Coverage Ratio 1.32 Cap Rate (Purchase Price) 6.6% Cash on Cash Return 5.5% Assumptions Appreciation Rate 2.5% Vacancy Rate 3.0% Income Inflation Rate 2.5% Expense Inflation Rate 3.0% LTV for Refinance 70.0% Selling Costs $108,500 3
Buy and Hold Projection Income Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Gross Rent $127,200 $130,380 $133,640 $140,405 $158,855 $203,348 $260,303 Vacancy Loss -$3,816 -$3,911 -$4,009 -$4,212 -$4,766 -$6,100 -$7,809 Technology Package $7,200 $7,380 $7,564 $7,947 $8,992 $11,510 $14,734 Operating Income $130,584 $133,849 $137,195 $144,140 $163,082 $208,758 $267,228 Expenses Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Cleaning & Maintenance -$1,800 -$1,854 -$1,910 -$2,026 -$2,349 -$3,156 -$4,242 Insurance -$1,300 -$1,339 -$1,379 -$1,463 -$1,696 -$2,280 -$3,064 Management Fees -$9,141 -$9,369 -$9,604 -$10,090 -$11,416 -$14,613 -$18,706 Taxes -$15,120 -$15,574 -$16,041 -$17,018 -$19,728 -$26,513 -$35,631 Association Fees -$16,320 -$16,810 -$17,314 -$18,368 -$21,294 -$28,617 -$38,459 Operating Expenses -$43,681 -$44,946 -$46,247 -$48,965 -$56,483 -$75,179 -$100,102 Income Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Net Operating Income $86,903 $88,903 $90,948 $95,175 $106,599 $133,579 $167,126 - Mortgage Payments -$65,602 -$65,602 -$65,602 -$65,602 -$65,602 -$65,602 -$65,599 - Improvements -$0 -$0 -$0 -$0 -$0 -$0 -$0 = Cash Flow $21,301 $23,301 $25,346 $29,574 $40,997 $67,977 $101,527 Cap Rate (Purchase Price) 6.6% 6.7% 6.9% 7.2% 8.1% 10.1% 12.7% Cap Rate (Market Value) 5.5% 5.5% 5.4% 5.4% 5.4% 5.3% 5.1% Cash on Cash Return 5.5% 6.1% 6.6% 7.7% 10.7% 17.7% 26.4% Return on Equity 3.5% 3.5% 3.5% 3.5% 3.5% 3.3% 3.1% Loan Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Market Value $1,588,750 $1,628,469 $1,669,180 $1,753,683 $1,984,131 $2,539,855 $3,251,230 - Loan Balance -$976,040 -$961,330 -$945,829 -$912,280 -$811,287 -$509,527 -$0 = Equity $612,710 $667,139 $723,352 $841,403 $1,172,844 $2,030,329 $3,251,230 Loan-to-Value Ratio 61.4% 59.0% 56.7% 52.0% 40.9% 20.1% 0.0% Potential Cash-Out Refi $136,085 $178,598 $222,598 $315,298 $577,604 $1,268,372 $2,275,861 Sale Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Equity $612,710 $667,139 $723,352 $841,403 $1,172,844 $2,030,329 $3,251,230 - Selling Costs -$111,212 -$113,993 -$116,843 -$122,758 -$138,889 -$177,790 -$227,586 = Proceeds After Sale $501,497 $553,146 $606,509 $718,645 $1,033,954 $1,852,539 $3,023,644 + Cumulative Cash Flow $21,301 $44,602 $69,948 $126,958 $308,593 $862,083 $1,720,374 - Initial Cash Invested -$384,000 -$384,000 -$384,000 -$384,000 -$384,000 -$384,000 -$384,000 = Net Profit $138,798 $213,748 $292,458 $461,603 $958,547 $2,330,622 $4,360,018 Internal Rate of Return 36.1% 25.3% 21.7% 18.5% 15.5% 13.4% 12.4% Return on Investment 36% 56% 76% 120% 250% 607% 1,135% 4
Graphs The Village at Centre Point 8-Plex $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 0 5 10 Monthly Cash Flow 15 Year 20 25 30 $3,500,000 Loan Balance + Equity = Market Value $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 0 5 10 15 Year 20 25 30 Internal Rate of Return (IRR) 35% 30% 25% 20% 15% 10% 5% 0% 0 5 10 15 Year 20 25 30 5
Rent Roll Unit Description Square Feet Units of This Type Rent (Per Unit) 3 Story 1 Car Garage Unit 1,800 4 $1,325 Per Month 3 Story 1 Car Garage Units 1,800 4 $1,325 Per Month Totals for Year 1 Total Number of Units 8 Total Area (Sum of Units) 14,400 Square Feet Total Rent (Sum of Units) $10,600 Per Month, $127,200 Per Year 6
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