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mathewowens2001
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This is an example property I provide to my clients with a 20% down investment. Typical cash on cash return is 15% - 25% with a 20% initial equity position and a loan after the 20% down payment of 64% of the market value. Great long term investment!
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2. Example Property OverviewFinanced OptionCash Option HOLD FOR CASHFLOWCASH PURCHASE Lender Pre- Proof of Fundsapprovalto OCGRent ($800 / Month)$9,600 Vacancy Allowance (8%) ($768)InvestmentProperty Mgmt (10%)($960) PreferenceInvestmentInsurance($500) PreferenceTaxes($956)PropertyRepair Allowance ($500)Analysis PropertyNet Income $5,916 AnalysisPROPERTY DETAILSDepreciation Benefit $404 Submit Offer & Earnest Money Address1603 Waverly, Memphis, TN Cash on Cash Return10.53%Area Downtown/Mid-town Initial Equity in Property Over Cost $20,000Submit Offer & Square Feet1,755 Equity ROI 33.33% Earnest Money Rehab Bid Bed5Total ROI60.70% Bath 2Year Built 1922AppraiseRehab Bid & HOLD FOR CASHFLOWProperty Appraisal Estimated Rent $800 PURCHASE WITH FINANCING Estimated Mkt Value$80,000Down Payment & Closing Costs * $15,500 Sales Price$27,750 Close Escrow Price-to-Value 34.69% into OCGs nameNet Income $5,916Close EscrowDebt Service (7% rate) ($3,823)COST ANALYSIS Renovate &Annual Cash flow $2,093 tenant property Purchase Price $27,750 Tax Benefit (30% tax rate) $571Renovate Rehab Amount $15,000propertyTotal Cash on Cash Return$2,664 Rehab Buffer (15%) $2,250 Sell to investorCash on Cash Return17.19% with 20% down Rehab Management $2,500Principal Reduction 1 st Yr$584 Sec 8 Inspection Repairs $1,000 TenantInitial Equity in Property Over Loan $32,000 Repairs After Move in$1,000property Property MgmtTotal Equity in Property Over Loan $32,584 Docs Commissions$3,000Purchase Closing Costs $1,500Equity ROI 210.22% Deal Syndication Fee $6,000Collect CashTotal ROI227.41% Collect CashFlows! Total Cost $60,000 Flows!*Down payment of 20% & sales price of 75% FMV Cost to Value75.00% Complete Documentation Provided (1) Renovation bid (2) Comparables for property (3) Before & After Pictures (4) Tenant lease & property mgmt agreement (5) Property mgmt info and referrals (6) Appraisals if purchasing with financing