Cash-on-Cash
1.30%
Debt Coverage (DSCR)
1.06
Gross Rent Multiplier
10.18
Price / Square Foot
$472
Price / Unit
$425,000
Year One Summary
- Scheduled gross income
- $168,000
- Less vacancy
- -$5,040
- Effective gross income
- $162,960
- Operating expenses
- -$55,505
- Expense ratio
- 34.1%
- Net operating income
- $107,455
- Loan amount
- $1,275,000
- Down payment
- $425,000
- Buying costs
- $17,000
- Monthly P & I
- $8,483
- Annual debt service
- $101,791
- Cash flow before taxes
- $5,664
- Annual depreciation
- $22,618
- Tax benefit
- $0
- Principal reduction
- $12,952
- Appreciation
- $17,000
- Total initial equity
- $435,000
- Return on initial equity
- 8.2%
Ten-Year Pro Forma
| Line item | Yr 1 | Yr 2 | Yr 3 | Yr 4 | Yr 5 | Yr 6 | Yr 7 | Yr 8 | Yr 9 | Yr 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Effective gross income | $162,960 | $166,219 | $169,544 | $172,934 | $176,393 | $179,921 | $183,519 | $187,190 | $190,934 | $194,752 |
| Operating expenses | -$55,505 | -$56,762 | -$58,049 | -$59,366 | -$60,714 | -$62,094 | -$63,506 | -$64,951 | -$66,431 | -$67,946 |
| Net operating income | $107,455 | $109,457 | $111,495 | $113,569 | $115,679 | $117,827 | $120,014 | $122,238 | $124,502 | $126,806 |
| Debt service | -$101,791 | -$101,791 | -$101,791 | -$101,791 | -$101,791 | -$101,791 | -$101,791 | -$101,791 | -$101,791 | -$101,791 |
| Cash flow (before tax) | $5,664 | $7,666 | $9,703 | $11,777 | $13,888 | $16,036 | $18,222 | $20,447 | $22,711 | $25,015 |
| Tax benefit | $0 | $0 | -$771 | -$2,000 | -$3,273 | -$4,594 | -$5,964 | -$7,387 | -$8,865 | -$10,401 |
| Principal reduction | $12,952 | $13,888 | $14,892 | $15,968 | $17,123 | $18,360 | $19,688 | $21,111 | $22,637 | $24,274 |
| Appreciation | $17,000 | $17,170 | $17,342 | $17,515 | $17,690 | $17,867 | $18,046 | $18,226 | $18,409 | $18,593 |
| Total return | $35,615 | $38,723 | $41,166 | $43,261 | $45,428 | $47,670 | $49,992 | $52,398 | $54,892 | $57,480 |
| Return on initial equity | 8.2% | 8.9% | 9.5% | 9.9% | 10.4% | 11.0% | 11.5% | 12.0% | 12.6% | 13.2% |
| Return on total equity | 8.2% | 8.3% | 8.3% | 8.2% | 8.1% | 8.0% | 7.9% | 7.8% | 7.7% | 7.7% |
| Property value (end) | $1,717,000 | $1,734,170 | $1,751,512 | $1,769,027 | $1,786,717 | $1,804,584 | $1,822,630 | $1,840,856 | $1,859,265 | $1,877,858 |
| Loan balance (end) | $1,262,048 | $1,248,161 | $1,233,269 | $1,217,300 | $1,200,178 | $1,181,817 | $1,162,130 | $1,141,019 | $1,118,381 | $1,094,108 |
| Est. net sale proceeds A/T | $412,549 | $433,440 | $455,462 | $478,688 | $503,197 | $529,075 | $556,412 | $585,304 | $615,858 | $648,183 |
Cap rate = Year 1 net operating income ÷ (purchase price + capital improvements). Depreciation is straight-line over the selected period on the improvement portion of basis plus buying costs and capital improvements. Long-term capital gain treatment requires holding the property a year and a day. This worksheet is an estimate only; actual investment performance may vary.
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