income property investing example used in 8-2-11 presentation to bni

Real Estate Investment ProposalPrepared by: Phil Levy, Lic no 01850664

InvestmentOpportunity

$84,968Excluding Loan Fees

Generates approximately $5,000 in annual cash flow with a Cash on

Cash return of 13.6% with 71% financing and a cap rate of 11.5%.

PALMDALE, CA

Single Family Residence, 1,546 Square Feet, 3/2

Cash return of 13.6% with 71% financing and a cap rate of 11.5%.

Approximately $37,100 needed up front with 29% financing.

The above agent/brokerage makes no warranty or representation about

the content of this brochure. While the information displayed herein is

thought to be accurate, it is your responsibility to independently confirm

its accuracy and completeness. Any projections, opinions, assumptions or

estimates are used for example only and do not represent the current or

future performance of the property. The above agent/brokerage neither practices accounting

nor gives advice regarding tax benefits/liabilities or any other tax, accounting or financial

consideration, nor does the above agent/brokerage give advice regarding financial

investments. It is strongly recommended that you seek appropriate professional counsel

regarding your rights as a homeowner.

For Information Contact: Phil Levy, Lic # 01850664Ph: [email protected]

8/1/2011 3:40 PMInvestment Package

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InvestmentFinancial Portrait

Property Specifications Investor Notes

Address:

Property Type: Single Family Residence

Year Built: 1984

Beds: 3Baths: 2

SqFt: 1,546Current List Price: $100,000

CDOM: 51 Offer Price: $70,500

Downpayment: $16,000 Downpayment: $24,000

Annual Cash Flow: $2,267 Annual Cash Flow: $3,019

Cash-on-Cash: 12.32% Cash-on-Cash: 11.44%

Pro Forma (Monthly)

• Positive Cash flow from

operations and after financing

• Convenient to shopping,

schools, restaurants, hospital.

• High distressed property area

has depressed prices.

• Will require clean-up and

upgrades to flooring, kitchen,

possibly repaint exterior

• Unusual gray exterior color

• Needs appliances. Figures

include $12,000 in fix-up and

appliances. Subject to

inspection

• Crime rate – Palmdale was

slightly lower than national

average in 2009.

• Property is located in a nice

gated community.

Estimated Monthly Rental Income: $1,500

Taxes: $118 Utilities & Trash: $55

Insurance: $33 Lawn Service: $45

HOA: $73 Maintenance: $100

Property Management: $140 Vacancy Reserve: $125

Estimated Operating Expenses: $688 Estimated Net Operating Income: $812

Estimated Operating Expenses $564 Excluding Vacancy Reserve

Debt Service $392 With 71% Financing

Total Estimated Carrying Cost $1,128 Recommend 6 times cash reserves

Monthly Vacancy Carry Cost: $1,128

The above agent/brokerage makes no warranty or representation about the

content of this brochure. While the information displayed herein is thought to

be accurate, it is your responsibility to independently confirm its accuracy and

completeness. Any projections, opinions, assumptions or estimates are used for

example only and do not represent the current or future performance of the

property. The above agent/brokerage neither practices accounting nor gives advice regarding tax

benefits/liabilities or any other tax, accounting or financial consideration, nor does the above

agent/brokerage give advice regarding financial investments. It is strongly recommended that you

seek appropriate professional counsel regarding your rights as a homeowner.



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InvestmentOptimization

5-Year Cumulative Cash-On-Cash Return

Year 1 Year 2 Year 3 Year 4 Year 5

20% 14.15% 28.29% 42.44% 56.58% 70.73%

25% 13.92% 27.83% 41.75% 55.66% 69.58%

29% 13.57% 27.13% 40.70% 54.27% 67.83%100% 11.46% 22.93% 34.39% 45.85% 57.32%

Acquisition Costs versus Cash-on-Cash Return

Down Payment

Acquisition Amount

Annual Cashflow

Cash-on-Cash

Return

10% n/a n/a n/a10% n/a n/a n/a

20% $30,708 $4,344 14.15%

25% $34,233 $4,764 13.92%

29% $37,108 $5,034 13.57%

100% $84,968 $9,740 11.46%

Finaning Assumptions:

Annual Interest Rate: Varies by pct financed

Term of Loan (in years): 15

Min Amount Financed 50,000.00

The above agent/brokerage makes no warranty or representation about the

content of this brochure. While the information displayed herein is thought to

be accurate, it is your responsibility to independently confirm its accuracy and

completeness. Any projections, opinions, assumptions or estimates are used for

example only and do not represent the current or future performance of the

property. The above agent/brokerage neither practices accounting nor gives advice regarding tax

benefits/liabilities or any other tax, accounting or financial consideration, nor does the above

agent/brokerage give advice regarding financial investments. It is strongly recommended that you

seek appropriate professional counsel regarding your rights as a homeowner.



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