Sunday, October 12, 2014

RE investment story: 13 unit asking 550K

by JY

Part I:

New prospect- 13 unit asking 550k, 2008-07-17 19:09:53

13 unit asking 550k, counter at 425k and owner financing.
will entry at $475, 10k closing

Gross Income (Year) $77,400.00

Vacancy
Vacancy Rate @ 10% $7,740.00

Operating Expenses
Fixed
Property taxes $7,800.00
Insurance $4,200.00

Variable
Property management
Maintenance $4,200.00
Legal Fees $200.00
Accounting fees $800.00
Advertising $300.00
Administrative expenses $600.00
Utilities $600.00

Total Expenses $26,440.00

Net Operating Income $50,960.00

Mortgage
- First Mortgage 20yr@7% $44,192.04
- Second Mortgage

Profit or Lost $6,767.96

Ratios
Debt Coverage Ratio 1.15
Cap Rate 11.32%
Cash on Cash Return 67.68%
Break Even Point On Units 10.56

Part II: 

New prospect- 13 unit asking 550k part2 2008-07-17 19:13:10

13 unit asking 550k, after a month long counter and counter offer,final accepted price 456k, 56k cash down less tax credit and deposit, 400k owner finance at 7% amortize over 20 years, 5 year balloon.

Gross Income (Year) $77,400.00

Vacancy
Vacancy Rate @ 10% $7,740.00

Operating Expenses
Fixed
Property taxes $7,800.00
Insurance $4,200.00

Variable
Property management
Maintenance $4,200.00
Legal Fees $200.00
Accounting fees $800.00
Advertising $300.00
Administrative expenses $600.00
Utilities $600.00

Total Expenses $26,440.00

Net Operating Income $50,960.00

Mortgage
- First Mortgage 20yr@7% $37,212
- Second Mortgage

Profit or Lost $13,748

Ratios
Debt Coverage Ratio 1.37
Cap Rate 11.75%
Cash on Cash Return 24.55%

 Part III:
New prospect- 13 unit asking 550k  part3 2008-07-18 09:20:12

5 month after closing on the property, with new round of tenant change and rent increase, monthly rent now at $7030 per month, increase from about $4800 when it was with previous landlord, expected vacancy down to 5% compare to previously expected 10%, positive cash flow expect to be $22,321 this year.

13 unit asking 550k, after a month long counter and counter offer,final accepted price 456k, 56k cash down less tax credit and deposit, 400k owner finance at 7% amortize over 20 years, 5 year balloon.

Gross Income (Year) $84,360.00

Vacancy
Vacancy Rate @ 5% $4,218.00

Operating Expenses
Fixed
Property taxes $7,800.00
Insurance $4,121.00

Variable
Property management
Maintenance $6,000.00
Legal Fees $200.00
Accounting fees $800.00
Advertising $300.00
Administrative expenses $200.00
Utilities $1,200.00

Total Expenses $24,839.00

Net Operating Income $59,521.00

Mortgage
- First Mortgage 20yr@7% $37,200
- Second Mortgage

Profit or Lost $22,321

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