ACQUISITION AND DEBT SERVICE SUMMARY
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Enter Purchase Price of the property. If you are financing the property, enter the Down Payment percentage here. For most investors, it’s usually a number between 20-30%. For a cash purchase, enter 100%. Next, enter the Closing Costs & Fees. If you are working with a lender, she can give you a good faith estimate for this line item.
Property Purchase Price
Down Payment %
=
50%
Mortgage Interest Rate (30 Yr Fixed)
50%
Closing Costs & Fees
PROPERTY INCOME AND OPERATING EXPENSE DATA
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Enter the Monthly Rent, Annual Property Tax and Annual Insurance Premium amounts here. The tax information is available on most county property tax websites. The insurance information is available from the insurance company. It is important to research whether or not the property is located in a homeowner’s association that carries Homeowner’s Association (HOA) fees. If so, enter the annual amount.
Monthly Rent
Annual Property Tax
Annual Insurance Premium
Annual HOA Fees / Other
ECONOMIC MODELING ASSUMPTIONS (PER YEAR, FOR 10 YEARS)
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In this section, you need to make some assumptions about the property as indicated to the right. Vacancy Rate: Percentage of Gross Scheduled Income (GSI) or total annual rents possible per year. Maintenance Rate: Percentage of Gross Operating Income (GOI), or the income the property receives after accounting for vacancy. Property Management Rate: Percentage of GOI, the amount of rents actually collected by the property manager. Property Appreciation Rate: Your expectation of how the property value will appreciate. Expense Inflation Rate: The general economic inflation percentage rate. Sales Costs: Costs associated with selling property when it is finally sold, including sales commissions and closing costs. This is a one-time expense.
*GOI = Gross Operating Income
Vacancy Rate (% of GSI)
% Advanced +
Year 1%
Year 2%
Year 3%
Year 4%
Year 5%
Year 6%
Year 7%
Year 8%
Year 9%
Year 10%
Maintenance Rate (% of GOI)
% Advanced +
Year 1%
Year 2%
Year 3%
Year 4%
Year 5%
Year 6%
Year 7%
Year 8%
Year 9%
Year 10%
Property Mgmt Rate (% of GOI)
% Advanced +
Year 1%
Year 2%
Year 3%
Year 4%
Year 5%
Year 6%
Year 7%
Year 8%
Year 9%
Year 10%
Property Appreciation Rate
% Advanced +
Year 1%
Year 2%
Year 3%
Year 4%
Year 5%
Year 6%
Year 7%
Year 8%
Year 9%
Year 10%
Rent Appreciation Rate
% Advanced +
Year 1%
Year 2%
Year 3%
Year 4%
Year5%
Year 6%
Year 7%
Year 8%
Year 9%
Year 10%
Expense Inflation Rate
% Advanced +
Year 1%
Year 2%
Year 3%
Year 4%
Year 5%
Year 6%
Year 7%
Year 8%
Year 9%
Year 10%
Sales Cost Rate (% of Price)
%
INVESTMENT AND DEBT SERVICE CALCULATIONS
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Investment and debt service calculations: Based on the data entered above, the investor’s total cash investment, and the monthly and annual debt service is calculated here.
Down Payment
Closing Costs & Fees
Total Cash Investment
DEBT SERVICE SUMMARY
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Investment and debt service calculations: Based on the data entered above, the investor’s total cash investment, and the monthly and annual debt service is calculated here.
Amount Financed
Debt Service (P&I), Monthly
Debt Service (P&I), Annual
KEY FINANCIAL RATIOS (RETURN ON INVESTMENT)
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Key Financial Ratios are calculated as 10-year averages to the right based on the data entered above. 10-Year Average Cash on Cash ROI – ten year average of cash on cash (CoC) return. Cash-On-Cash ROI + Debt Pay Down – this is the combined return of the debt pay down and the cash on cash return. 10-Year Average Capitalization Rate – 10 year average of annual Net Operating Income of the property divided by its purchase price. This is the approximate annual CoC return for an all-cash purchase. 10-Year Internal Rate of Return (IRR) – the annual return accounting for the amount invested, cash flow earned through rents, pay down of the mortgage loan, and appreciation realized from the sale of the property. IRR is an overall return on investment metric that accounts for the amount and timing of all cash flows disbursed and received each year.
10-Year Average Cash-On-Cash ROI
Avg 10-Year CoC
Cash-On-Cash ROI + Debt Paydown ROI
Avg 10-Year CoC + Debt Paydown ROI, Excl. Appreciation
10-Year Average Capitalization Rate
10-Year Avg Net Operating Income ÷ Purchase price
10-Year Internal Rate of Return
IRR per Year
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