Rental property deal report
Example duplex — 1400 block, Elmwood
$265,000 purchase price
25.0% down at 6.750% over 30 years
Monthly cash flow
+$320
Cap rate
7.29%
Cash-on-cash
4.75%
DSCR
1.25
| Annual operating statement | Per year |
|---|---|
| Gross scheduled rent | $31,800 |
| Other income | $900 |
| Gross potential income | $32,700 |
| Vacancy and credit loss | ($1,635) |
| Effective gross income | $31,065 |
| Property tax | ($3,420) |
| Insurance | ($1,650) |
| Utilities | ($720) |
| Other operating | ($300) |
| Property managementon collected rent | ($2,485) |
| Maintenance reserveon scheduled rent | ($1,590) |
| CapEx reserveon scheduled rent | ($1,590) |
| Total operating expenses | ($11,755) |
| Net operating income | $19,310 |
| Annual debt servicenot an operating expense | ($15,469) |
| Pre-tax cash flow | +$3,841 |
| Acquisition | Amount |
|---|---|
| Purchase price | $265,000 |
| Loan amount | $198,750 |
| Down payment | $66,250 |
| Closing costs | $6,625 |
| Up-front rehab | $8,000 |
| Total cash invested | $80,875 |
| All-in costprice + closing + rehab | $279,625 |
| Monthly principal and interest | $1,289.09 |
| Ratios | Value |
|---|---|
| Gross rent multiplier | 8.33 |
| Gross yield | 12.00% |
| Rent to price | 1.00% |
| Operating expense ratio | 37.8% |
| Break-even occupancy | 82.2% |
| Break-even rent | $2,236 |
| Cap rate on all-in cost | 6.91% |
| Monthly loan payment | $1,289.09 |
| Year-one total return | 17.20% |
If rent moves
| Scenario | NOI | Cap rate | Cash-on-cash | DSCR | Cash flow / mo |
|---|---|---|---|---|---|
| -15% rent | $15,618 | 5.89% | 0.18% | 1.01 | +$12 |
| -10% rent | $16,848 | 6.36% | 1.71% | 1.09 | +$115 |
| -5% rent | $18,079 | 6.82% | 3.23% | 1.17 | +$218 |
| 0% rent | $19,310 | 7.29% | 4.75% | 1.25 | +$320 |
| +5% rent | $20,540 | 7.75% | 6.27% | 1.33 | +$423 |
| +10% rent | $21,771 | 8.22% | 7.79% | 1.41 | +$525 |
Ten-year projection
| Year | NOI | Cash flow | Loan balance | Value | Equity | Profit if sold | IRR |
|---|---|---|---|---|---|---|---|
| 1 | $19,310 | +$3,841 | $196,632 | $272,950 | $76,318 | −$19,823 | -24.5% |
| 2 | $19,889 | +$4,420 | $194,366 | $281,139 | $86,772 | −$5,522 | -3.6% |
| 3 | $20,486 | +$5,017 | $191,943 | $289,573 | $97,630 | +$9,762 | 4.1% |
| 4 | $21,100 | +$5,631 | $189,351 | $298,260 | $108,909 | +$26,065 | 7.7% |
| 5 | $21,733 | +$6,264 | $186,578 | $307,208 | $120,630 | +$43,423 | 9.8% |
| 6 | $22,385 | +$6,916 | $183,612 | $316,424 | $132,812 | +$61,876 | 11.0% |
| 7 | $23,057 | +$7,588 | $180,440 | $325,917 | $145,476 | +$81,464 | 11.8% |
| 8 | $23,749 | +$8,280 | $177,047 | $335,694 | $158,647 | +$102,230 | 12.3% |
| 9 | $24,461 | +$8,992 | $173,418 | $345,765 | $172,347 | +$124,217 | 12.7% |
| 10 | $25,195 | +$9,726 | $169,536 | $356,138 | $186,602 | +$147,472 | 12.9% |
Rent grows 3.0% a year, fixed expenses 3.0%, value 3.0%. Sale assumes 7.0% of selling costs and repayment of the loan balance, which is $169,536 after ten years.