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IN ESCROW
Client - 15 Unit SFH - New Construction
Phoenix, AZ 85018
9 bedrooms 9.5 bathrooms
3 bdrm/ 2.5 bath each unit - Only 3 units vacant
| Projected Income | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Projected Rent | $622,200 | $640,866 | $660,092 | $679,895 | $700,292 | $721,300 | $742,939 | $765,228 | $788,184 | $811,830 |
| Vacancy Losses | ($49,776) | ($51,269) | ($52,807) | ($54,392) | ($56,023) | ($57,704) | ($59,435) | ($61,218) | ($63,055) | ($64,946) |
| Operating Income | $572,424 | $589,597 | $607,285 | $625,503 | $644,268 | $663,596 | $683,504 | $704,009 | $725,130 | $746,883 |
| Estimated Expenses | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Property Taxes | ($13,875) | ($14,291) | ($14,720) | ($15,162) | ($15,616) | ($16,085) | ($16,567) | ($17,064) | ($17,576) | ($18,104) |
| Insurance | ($9,250) | ($9,528) | ($9,813) | ($10,108) | ($10,411) | ($10,723) | ($11,045) | ($11,376) | ($11,718) | ($12,069) |
| Management Fees | ($22,897) | ($23,584) | ($24,291) | ($25,020) | ($25,771) | ($26,544) | ($27,340) | ($28,160) | ($29,005) | ($29,875) |
| Leasing/Advertising Fees | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Association Fees | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Maintenance | ($12,444) | ($12,817) | ($13,202) | ($13,598) | ($14,006) | ($14,426) | ($14,859) | ($15,305) | ($15,764) | ($16,237) |
| Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Operating Expenses | ($58,466) | ($60,220) | ($62,027) | ($63,887) | ($65,804) | ($67,778) | ($69,811) | ($71,906) | ($74,063) | ($76,285) |
| Income Analysis | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Operating Income | $513,958 | $529,377 | $545,258 | $561,616 | $578,464 | $595,818 | $613,693 | $632,104 | $651,067 | $670,599 |
| - Mortgage Payments | ($390,813) | ($390,813) | ($390,813) | ($390,813) | ($390,813) | ($390,813) | ($390,813) | ($390,813) | ($390,813) | ($390,813) |
| = Cash Flow | $123,146 | $138,564 | $154,446 | $170,803 | $187,652 | $205,006 | $222,880 | $241,291 | $260,254 | $279,786 |
| + Principal Reduction | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| + Appreciation | $555,000 | $588,300 | $623,598 | $661,014 | $700,675 | $742,715 | $787,278 | $834,515 | $884,586 | $937,661 |
| = Gross Equity Income | $678,146 | $726,864 | $778,044 | $831,817 | $888,326 | $947,721 | $1,010,158 | $1,075,806 | $1,144,840 | $1,217,447 |
| Capitalization Rate | 5.2% | 5.1% | 4.9% | 4.8% | 4.7% | 4.5% | 4.4% | 4.3% | 4.2% | 4.0% |
| Cash on Cash Return | 3.4% | 3.8% | 4.2% | 4.7% | 5.2% | 5.6% | 6.1% | 6.6% | 7.2% | 7.7% |
| Return on Equity | 17.9% | 16.6% | 15.5% | 14.7% | 14.0% | 13.3% | 12.8% | 12.3% | 11.9% | 11.5% |
| Loan Analysis | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Market Value | $9,805,000 | $10,393,300 | $11,016,898 | $11,677,912 | $12,378,587 | $13,121,302 | $13,908,580 | $14,743,095 | $15,627,680 | $16,565,341 |
| - Loan Balance | ($6,012,500) | ($6,012,500) | ($6,012,500) | ($6,012,500) | ($6,012,500) | ($6,012,500) | ($6,012,500) | ($6,012,500) | ($6,012,500) | ($6,012,500) |
| = Equity | $3,792,500 | $4,380,800 | $5,004,398 | $5,665,412 | $6,366,087 | $7,108,802 | $7,896,080 | $8,730,595 | $9,615,180 | $10,552,841 |
| Loan-to-Value Ratio | 61.3% | 57.8% | 54.6% | 51.5% | 48.6% | 45.8% | 43.2% | 40.8% | 38.5% | 36.3% |
| Potential Cash-Out Refi | $2,812,000 | $3,341,470 | $3,902,708 | $4,497,621 | $5,128,228 | $5,796,672 | $6,505,222 | $7,256,285 | $8,052,412 | $8,896,307 |
| Sale Analysis | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 |
|---|---|---|---|---|---|---|---|---|---|---|
| Equity | $3,792,500 | $4,380,800 | $5,004,398 | $5,665,412 | $6,366,087 | $7,108,802 | $7,896,080 | $8,730,595 | $9,615,180 | $10,552,841 |
| - Closing Costs | ($686,350) | ($727,531) | ($771,183) | ($817,454) | ($866,501) | ($918,491) | ($973,601) | ($1,032,017) | ($1,093,938) | ($1,159,574) |
| = Proceeds After Sale | $3,106,150 | $3,653,269 | $4,233,215 | $4,847,958 | $5,499,586 | $6,190,311 | $6,922,479 | $7,698,578 | $8,521,243 | $9,393,267 |
| + Cumulative Cash Flow | $123,146 | $261,710 | $416,155 | $586,959 | $774,610 | $979,616 | $1,202,496 | $1,443,787 | $1,704,042 | $1,983,828 |
| - Approximate Cash Invested | ($3,635,250) | ($3,635,250) | ($3,635,250) | ($3,635,250) | ($3,635,250) | ($3,635,250) | ($3,635,250) | ($3,635,250) | ($3,635,250) | ($3,635,250) |
| = Net Profit | ($405,954) | $279,729 | $1,014,120 | $1,799,667 | $2,638,946 | $3,534,677 | $4,489,726 | $5,507,116 | $6,590,034 | $7,741,845 |
| Internal Rate of Return | -11.2% | 3.8% | 8.8% | 11.1% | 12.2% | 12.8% | 13.2% | 13.3% | 13.4% | 13.4% |
| Return on Investment | -11.2% | 7.7% | 27.9% | 49.5% | 72.6% | 97.2% | 123.5% | 151.5% | 181.3% | 213.0% |
*Information is not guaranteed and investors should do their own research, get professional advice and conduct due diligence prior to investing.
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