Investment Breakdown:
2346 W. Jackson Blvd
Sale at 8 Cap Months 12-24
Construction Loan
Total Debt 640,100.00
Cash Needed to Obtain Financing
Start-Up Fees 10,000.00
Down Payment + Loan Fees 168,025.00
10% Reserve Account 80,000.00
12 Months of 6% Interest Payments 38,406.00
Total Cash Needed to Obtain Financing 296,431.00
Monthly Operating Income
Number of Multi-Family Units 7
Average Monthly Rent per Unit 1,600.00
Total Rental Income 11,200.00
% Vacancy and Credit Losses7.00%
Total Vacancy Loss 784.00
Gross Monthly Operating Income 10,416.00
Monthly Operating Expenses
Property Management Fees (7%) 784.00
Repairs and Maintenance 1,000.00
Real Estate Taxes 1,000.00
Rental Property Insurance 1,000.00
Replacement Reserve (3%) 336.00
Utilities (Common Areas) 400.00
Misc
Accounting and Legal
Monthly Operating Expenses 2,604.00
Net Operating Income (NOI)
Total Annual Operating Income 124,992.00
Total Annual Operating Expense 31,248.00
Annual Net Operating Income 93,744.00
Operating Margin75%
Capitalization Rate and Valuation
Desired Capitalization Rate (Area Average for Class A)8.00%
Construction Costs 800,000.00
Cost of Land 125.00
Actual Purchase Price 800,125.00
Actual Capitalization Rate11.72%
Value Based on Area Cap Rate 1,171,800.00
Total Cost Per Unit 114,303.57
Total Value Per Unit 167,400.00
Total Profit Per Unit 53,096.43
Loan Information
Down Payment (20%) 160,025.00
Loan Amount 640,100.00
Acquisition Costs and Loan Fees (1%) 8,000.00
Length of Mortgage (Years) 30
Annual Interest Rate5.000%
Initial Investment 168,025.00
Monthly Mortgage Payment (PI) 3,436.20
Annual Interest 31,790.53
Annual Principal 9,443.81
Total Annual Debt Service 41,234.34
Cash Flow and ROI
Total Monthly Cash Flow (before taxes) 4,375.80
Total Annual Cash Flow (before taxes) 52,509.66
Cash on Cash Return (ROI)31.25%
Post Construction Equity (12 Months)
Total Debt 640,100.00
Property Value 1,171,800.00
Total Equity 531,700.00
Sale of Equity (12-24 Months)
Total Debt to Commercial Lender 640,100.00
Total Debt to Investors 296,431.00
Total Debt 936,531.00
Brokers Fees & Closing Cost of 2% 23,436.00
Profit from Sale 1,171,800.00
Total Profit After Debt Repayment 211,833.00
Investor Returns (12-24 Months)
Initial Investment Amount by Investor 296,431.00
Cash Paid to Investor (75%) 158,874.75
Cash Paid to The Murray Group (25%) 74,107.75
Investor Cash on Cash Return (ROI)54%
Total Investor Cash after 12-24 Months 455,305.75