Multifamily

Investment strategy: Rental Property

The main home is a 2 bed 1 bath (1107 sq ft) and the mother-in-law suite is a 1 bed 1 bath (527 sq ft). The house can qualify for conventional financing.

Year built – Main home: 1925, Mother-in-law suite: 1980

Off Market Properties

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Purchase Price $ 170,000
Rent $ 2.000/mo
Monthly Cash Flow $ 754
Cash on Cash Return 25.84 %

Financial Analysis

Cash on Cash Return 12.45 %
Internal Rate of Return (IRR) 39.79 %
Capitalization Rate 6.95 %
Gross Rent Multiplier (GRM) 9.40
Debt-coverage Ratio (DCR) 1.22
Operating Expense Ratio (OER) 32.69 %
After Repair Value $ 141,000
Profit/Equity From Rehab $ 20,910

Operating Analysis

Rent $ 1,250/mo
Gross Operating Income (GOI) $ 14,550
Total Expenses $ 4,756
Net Operating Income (NOI) $ 9,794
Annual Debt Service $ 8,040
Cash Flow Before Taxes (CFBT) $ 1,754
Income Tax Liability $ 29
Cash Flow After Taxes (CFAT) $ 1,725

Financial Breakdown

Purchase Price $ 97,000
Purchase Costs $ 3,090
Repair/Construction Costs $ 20,000
Total Capital Needed $ 120,090
Financing $ 106,000
Total Cash Needed $ 14,090
Cash at Closing $ 1,590
Cash During Rehab $ 12,500

Purchase Price $ 97,000
Address 3102 E Shadowlawn Ave , Tampa, 33610, FL
Year Built 1971
Type Singlefamily
Size 1012 SF
Bedrooms 3
Bathrooms 1

Annual Property Operating Data

Incomes % of GOI
Gross Scheduled Income $ 15,000  
Total Gross Income $ 15,000  
Vacancy loss $ 450  
Gross Operating Income $ 14,550 100.00 %
Expenses
Property manager $ 1,455 10.00 %
Insurance $ 1,000 6.87 %
Repairs $ 1,000 6.87 %
Property tax $ 1,301 8.94 %
Total Expenses $ 4,756 32.69 %
Net Operating Income $ 9,794 67.31 %

Cash Flow (Year 1)

Net Operating Income $ 9,794 67.31 %
Annual Debt Service $ 8,040 55.26 %
Cash Flow Before Taxes (CFBT) $ 1,754 12.06 %
Income Tax Liability $ 29 0.20 
Cash Flow After Taxes (CFAT) $ 1,725 11.85 %

Operating Ratios

Operating Expense Ratio 32.69 %
Break-Even Ratio 87.94 %

Financial Measures

Net Present Value $ 37,079
Internal Rate of Return 39.79 %
Profitability Index 3.63
Annual Depreciation $ 2,822

Holding period of 5 years and discount rate of 5.00% were used for calculation of NPV and IRR. The rest of the financial measures are for the 1st year only and therefore don’t provide such an exact information.

Investment Return Ratios

Cash on Cash Return 12.45 %
Return on Investment 33.10 %
Capitalization Rate 6.95 %
Gross Rental Yield 15.46 %
Gross Rent Multiplier 9.40

Financing % of ARV
Down Payment $ 0 0.00 %
BRRRR @ 75% LTV of ARV 141k $ 106,000 75.18 %
Loan to Value Ratio   109.28 %
Loan to Cost Ratio   90.60 %
Debt Coverage Ratio   1.22
Type Amortized
Loan Amount $ 106,000
Down payment (0%) $ 0
Amortization 30 years
Interest Rate 6.50 %
Monthly Payment $ 669.99

BRRRR @ 75% LTV of ARV 141k
Financing of: Specific amount ($ 106,000)

Year 0 1 2 3 4 5
Operational Analysis
Gross Scheduled Income 0 15,000 15,300 15,606 15,918 16,236
Vacancy Loss 0 450 459 468 478 487
Gross Operating Income 0 14,550 14,841 15,138 15,441 15,749
Expenses 0 4,756 4,851 4,948 5,047 5,148
Net Operating Income 0 9,794 9,990