ROI Forecaster Property Investment Analysis Prepared Exclusively For John Q. Investor

Transcription

1 ROI Forecaster Property Investment Analysis Prepared Exclusively For John Q. Investor Copyright Real Estate Informatics, Inc. All Rights Reserved.

2 Input Dashboard Property Name Property Address ROI Forecaster Online Property Purchase Costs Building & Fixtures Values Rental Income Values Value Market Value $ 450, Building as % of Cost 80.0% Rent per Month $9, Purchase Price $ 425, Building Cost $ 340, Annual Vacancy Rate 7.0% Closing Costs $ 6, Cost of Fixtures $ 20, Annual Rent $ 107, Total Cost $ 431, Initial Expenses Recurring Annual Expenses Mortgage Structure Cost Initial Cash Investment $ 42, Cost Utility fees $ Balance of Purchase $ 382, Appraisal fees $ Cleaning fees $ Fees Included in Mortgage $ Inspection fees $ Association fees $ 1, Total to be Financed $ 382, Mortgage insurance fees $ Insurance fees $ 1, Mortgage application fees $ Security service fees $ Amount of 1st Mortgage $ 300, Legal / Notary fees $ Maintenance fees $ 1, st Mortgage Rate (%) 6.000% Title insurance fees $ Landscaping fees $ st Mortgage Term (years) 20 Assumption fees $ Pest control fees $ Additional Monthly Payment $ Search fees $ Property taxes $ 1, Other fees $ Other expenses $ Principal & Interest Mortgage Amount of 2nd Mortgage $ 82, Mortgage Origination Fees $ Total $ 7, nd Mortgage Rate (%) 6.500% 2nd Mortgage Term (years) 20 Total Initial Expenses $ Management Fee % 10.0% Additional Monthly Payment $ Annual Mgmt Fee $ 10, Principal & Interest Mortgage Capital Improvements Unique Annual Expenses Economic & Tax Assumptions Cost Cost Growth Rates & Discount Rate Year 1 $ 1, Year 1 $ Year 2 $ Year 2 $ Expense Growth Rate 3.0% Year 3 $ Year 3 $ Year 4 $ Year 4 $ Annual Capital Growth Rate 5.0% Year 5 $ Year 5 $ Year 6 $ Year 6 $ Annual Rent Growth Rate 3.0% Year 7 $ Year 7 $ Year 8 $ Year 8 $ NPV Discount Rate 10.0% Year 9 $ Year 9 $ Year 10 $ 1, Year 10 $ Year 11 $ Year 11 $ Building Depreciation Rate 3.64% Year 12 $ Year 12 $ Year 13 $ Year 13 $ Year 14 $ Year 14 $ StraightLine Depreciation Method Used Year 15 $ Year 15 $ Year 16 $ Year 16 $ Year 17 $ Year 17 $ Fixtures Depreciation Rate 20.00% Year 18 $ Year 18 $ Year 19 $ Year 19 $ Year 20 $ Year 20 $ StraightLine Depreciation Method Used Year 21 $ Year 21 $ Year 22 $ Year 22 $ Year 23 $ Year 23 $ Income Tax Brackets Year 24 $ Year 24 $ Upper End Rate Year 25 $ Year 25 $ 1st: $0 to $ 10, % Year 26 $ Year 26 $ 2nd: $10,000 to $ 27, % Year 27 $ Year 27 $ 3rd: $27,050 to $ 65, % Year 28 $ Year 28 $ 4th: $65,550 to $ 136, % Year 29 $ Year 29 $ 5th: $136,750 to $ 297, % Year 30 $ Year 30 $ Maximum Bracket Unlimited 39.1% Sale of Property Options Costs to Sell Property Capital Gain Tax Rate Sell Property? NO Cost LikeKind Exchange? NO Commission fees $ Rate Administration fees $ Capital Gain Tax Rate 20.0% Year of Sale 0 Title fees $ Sale Price $ Other expenses $ Note: The capital gain tax is applied only if the Total Costs to Sell $ property is sold, a gain exists, and the sale is not tax deferred.

3 Investment Detail Purchase Price $425, Loan Terms 20 years at 6% / 20 years at 6.5% Closing Costs $6, Mortgage Type Principal & Interest Mortgage / Principal & Interest Mortgag Total Cost $431, Total Financing $382, Initial Expenses $ Annual Rental Income $107, Recurring Annual Expenses $7, Annual Inflation Rate 3.00% Annual Management Fee $10, Annual Rent Growth Rate 3.00% Initial Cash Investment $42, Annual Capital Growth Rate 5.00% Property Equity Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Capital appreciation $ 22, $ 23, $ 24, $ 26, $ 27, $ 28, $ 30, $ 31, $ 33, $ 34, Capital improvements $ 1, $ $ $ $ $ $ $ $ $ 1, Property Value $ 473, $ 497, $ 522, $ 548, $ 575, $ 604, $ 634, $ 666, $ 699, $ 735, Loan(s) outstanding $ 372, $ 361, $ 350, $ 338, $ 325, $ 311, $ 297, $ 281, $ 265, $ 247, Equity $ 101, $ 135, $ 171, $ 209, $ 250, $ 292, $ 337, $ 384, $ 434, $ 487, Net Income Gross rent $ 107, $ 110, $ 113, $ 117, $ 120, $ 124, $ 127, $ 131, $ 135, $ 139, Initial expenses in mortgage $ Cash operating expenses $ 25, $ 18, $ 19, $ 19, $ 20, $ 21, $ 21, $ 22, $ 23, $ 23, Building depreciation expense $ 12, $ 12, $ 12, $ 12, $ 12, $ 12, $ 12, $ 12, $ 12, $ 12, Furnishings & Fixtures depreciation expense $ 4, $ 4, $ 4, $ 4, $ 4, $ $ $ $ $ Interest expenseall mortgages $ 23, $ 22, $ 21, $ 21, $ 20, $ 19, $ 18, $ 17, $ 16, $ 15, Total expenses $ 64, $ 57, $ 57, $ 57, $ 57, $ 52, $ 52, $ 52, $ 52, $ 51, Income before tax $ 42, $ 52, $ 56, $ 59, $ 62, $ 71, $ 75, $ 79, $ 83, $ 87, Income tax $ 8, $ 11, $ 12, $ 13, $ 13, $ 16, $ 17, $ 18, $ 20, $ 21, Net income $ 34, $ 41, $ 44, $ 46, $ 49, $ 54, $ 57, $ 60, $ 63, $ 66, Cash Flow Gross rent $ 107, $ 110, $ 113, $ 117, $ 120, $ 124, $ 127, $ 131, $ 135, $ 139, Property sale $ $ $ $ $ $ $ $ $ $ Property selling costs $ $ $ $ $ $ $ $ $ $ Net cash inflow from property sale $ $ $ $ $ $ $ $ $ $ Capital improvements $ 1, $ $ $ $ $ $ $ $ $ 1, Interest payment 1st mortgage $ 17, $ 17, $ 16, $ 16, $ 15, $ 14, $ 14, $ 13, $ 12, $ 12, Interest payment 2nd mortgage $ 5, $ 5, $ 5, $ 4, $ 4, $ 4, $ 4, $ 4, $ 3, $ 3, Principal payment 1st mortgage $ 8, $ 8, $ 9, $ 9, $ 10, $ 10, $ 11, $ 12, $ 12, $ 13, Principal payment 2nd mortgage $ 2, $ 2, $ 2, $ 2, $ 2, $ 2, $ 3, $ 3, $ 3, $ 3, Total mortgage payments $ 33, $ 33, $ 33, $ 33, $ 33, $ 33, $ 33, $ 33, $ 33, $ 33, Initial expenses not in mortgage $ 6, Recurring annual expenses $ 7, $ 7, $ 7, $ 8, $ 8, $ 8, $ 8, $ 9, $ 9, $ 9, Unique annual expenses $ $ $ $ $ $ $ $ $ $ Management fees $ 10, $ 11, $ 11, $ 11, $ 12, $ 12, $ 12, $ 13, $ 13, $ 13, Cash operating expenses $ 25, $ 18, $ 19, $ 19, $ 20, $ 21, $ 21, $ 22, $ 23, $ 23, Pretax cash flow $ 47, $ 58, $ 61, $ 64, $ 66, $ 69, $ 73, $ 76, $ 79, $ 81, Income tax $ 8, $ 11, $ 12, $ 13, $ 13, $ 16, $ 17, $ 18, $ 20, $ 21, Capital gain tax $ $ $ $ $ $ $ $ $ $ Aftertax cash flow $ 39, $ 47, $ 49, $ 51, $ 52, $ 53, $ 55, $ 57, $ 59, $ 60, Aftertax cash flow per month $ 3, $ 3, $ 4, $ 4, $ 4, $ 4, $ 4, $ 4, $ 4, $ 5, Original cash investment $ 42, $ 42, $ 42, $ 42, $ 42, $ 42, $ 42, $ 42, $ 42, $ 42, Pretax cashoncash return % % % % % % % % % % Aftertax cashoncash return 92.96% % % % % % % % % % Internal rate of return of aftertax cash flows 103.9% Net present value $ 538,662 *Note: Property was not sold a continuing value at end of Year 30 is included in IRR & NPV calculations.

4 30 Year Cash Flow Projection Purchase Price $425, Loan Terms 20 years at 6% / 20 years at 6.5% Closing Costs $6, Mortgage Type Principal & Interest Mortgage / Principal & Interest Mortg Total Cost $431, Total Financing $382, Initial Expenses $ Annual Rental Income $107, Recurring Annual Expenses $7, Annual Inflation Rate 3.00% Annual Management Fee $10, Annual Rent Growth Rate 3.00% Initial Cash Investment $42, Annual Capital Growth Rate 5.00% Annual Property Cash Flow 30 Year Projection $250,000 $200,000 Pretax Aftertax $150,000 $100,000 $50,000 $ $(50,000) Initial Investment Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 $(100,000) Time Rental Mortgage Cash Capital Pretax Total Aftertax Period Income Payments Expenses Improvements Cash Flow Taxes Cash Flow Initial Investment $ (42,500.00) $ (42,500.00) Year 1 $ 107, $ 33, $ 25, $ 1, $ 47, $ 8, $ 39, Year 2 $ 110, $ 33, $ 18, $ $ 58, $ 11, $ 47, Year 3 $ 113, $ 33, $ 19, $ $ 61, $ 12, $ 49, Year 4 $ 117, $ 33, $ 19, $ $ 64, $ 13, $ 51, Year 5 $ 120, $ 33, $ 20, $ $ 66, $ 13, $ 52, Year 6 $ 124, $ 33, $ 21, $ $ 69, $ 16, $ 53, Year 7 $ 127, $ 33, $ 21, $ $ 73, $ 17, $ 55, Year 8 $ 131, $ 33, $ 22, $ $ 76, $ 18, $ 57, Year 9 $ 135, $ 33, $ 23, $ $ 79, $ 20, $ 59, Year 10 $ 139, $ 33, $ 23, $ 1, $ 81, $ 21, $ 60, Year 11 $ 143, $ 33, $ 24, $ $ 86, $ 22, $ 63, Year 12 $ 148, $ 33, $ 25, $ $ 89, $ 24, $ 65, Year 13 $ 152, $ 33, $ 25, $ $ 93, $ 25, $ 67, Year 14 $ 157, $ 33, $ 26, $ $ 97, $ 27, $ 70, Year 15 $ 162, $ 33, $ 27, $ $ 101, $ 29, $ 72, Year 16 $ 166, $ 33, $ 28, $ $ 105, $ 30, $ 74, Year 17 $ 171, $ 33, $ 29, $ $ 109, $ 32, $ 77, Year 18 $ 177, $ 33, $ 30, $ $ 113, $ 34, $ 79, Year 19 $ 182, $ 33, $ 30, $ $ 118, $ 36, $ 82, Year 20 $ 187, $ 33, $ 31, $ $ 122, $ 38, $ 84, Year 21 $ 193, $ $ 32, $ $ 160, $ 40, $ 120, Year 22 $ 199, $ $ 33, $ $ 165, $ 42, $ 123, Year 23 $ 205, $ $ 34, $ $ 170, $ 43, $ 126, Year 24 $ 211, $ $ 35, $ $ 175, $ 45, $ 129, Year 25 $ 217, $ $ 36, $ $ 180, $ 47, $ 133, Year 26 $ 224, $ $ 38, $ $ 186, $ 49, $ 136, Year 27 $ 231, $ $ 39, $ $ 191, $ 51, $ 140, Year 28 $ 237, $ $ 40, $ $ 197, $ 55, $ 141, Year 29 $ 245, $ $ 41, $ $ 203, $ 60, $ 143, Year 30 $ 252, $ $ 42, $ $ 209, $ 62, $ 147, *Note: Property was not sold a continuing value at end of Year 30 is included in IRR & NPV calculations. IRR OF AFTERTAX CASH FLOWS* = 103.9% NPV OF INVESTMENT* = $538,662 at discount rate of 10%

5 END OF REPORT (THIS PAGE INTENTIONALLY LEFT BLANK) Copyright 2003 Real Estate Informatics, Inc. All Rights Reserved.