Pre-Leased Property
Vero Beach, FL 32962
3bd • 2ba • Built: 1977
3 Bedroom 2 Full Bath, 2 car garage, ~1/2 acre
| Estimated Square Feet | 2,271 | | Initial Market Value | $425,000 | | Price | $425,000 | | Downpayment | $106,250 | | Loan Origination Fees | $6,375 | | Depreciable Closing Costs | $12,750 | | Other Costs and Fixup | $10,000 | | Approximate Cash Invested | $135,375 | | Cost per Square Foot / per Bedroom | $187 / $141,667 | | Monthly Rent per SQFT / per Bedroom | $1.14 / $865 |
| Projected Income | Monthly | Annual |
|---|
| Projected Rent | $2,595 | $31,140 | | Vacancy Losses | ($208) | ($2,491) | | Operating Income | $2,387 | $28,649 |
| Estimated Expenses | Monthly | Annual |
|---|
| Property Taxes | ($425) | ($5,100) | | Insurance | ($266) | ($3,188) | | Management Fees | $0 | $0 | | Leasing/Advertising Fees | $0 | $0 | | Association Fees | $0 | $0 | | Maintenance | ($208) | ($2,491) | | Other (Utilities, Supplies, etc.) | $0 | $0 | | Operating Expenses | ($898) | ($10,779) |
| Net Performance | Monthly | Annual |
|---|
| Net Operating Income | $1,489 | $17,870 | | - Mortgage Payments | ($1,660) | ($19,922) | | = Cash Flow | ($171) | ($2,052) | | + Principal Reduction | $0 | $0 | | + Inflation Induced Debt Destruction® (IIDD) - Beta | $797 | $9,563 | | + First-Year Appreciation | $1,771 | $21,250 | | = Gross Equity Income | $2,397 | $28,761 |
| | Mortgage Info | First | Second |
|---|
| Loan-to-Value Ratio | 75% | N/A | | Loan Amount | $318,750 | N/A | | Monthly Payment | $1,660.16 | N/A | | Loan Type | Interest Only Fixed | N/A | | Term | 10 Years | N/A | | Nominal / Real Interest Rate | 6.250% / 3.250% | N/A | | Monthly PMI | $0 | N/A |
| Empowered Investor® Indicators | |
|---|
| Rent-to-Value Ratio™ (RV Ratio™) | 0.6% | | Debt Coverage Ratio | 0.90 | | Annual Gross Rent Multiplier | 14 | | Capitalization Rate | 4.2% | | Cash on Cash Return | -2% | | Return on Investment | 14% | | Return on Investment with IIDD | 21% | | + Tax Benefits: Deductions, Depreciation, 1031 Exchange, etc. |
| Assumptions & Projections | |
|---|
| Projected Appreciation Rate | 5% | | Projected Inflation Rate | 3% | | Vacancy Rate | 8% | | Management Fee | 0% | | Maintenance Percentage | 8% |
*Information is not guaranteed and investors should do their own research, get professional advice and conduct due diligence prior to investing.
|
Down payment
The amount you pay upfront.
Purchase price
− First loan − Second loan
Approximate cash invested
All the cash you put in at the start.
Down payment + Closing costs + Fix-up costs + Loan fees
Cost per square foot
Helps you compare prices across properties.
Purchase price / Square feet
Rent per square foot
Useful for comparing rental income.
Monthly rent / Square feet
Nominal / Real interest rate
Nominal is the stated interest rate on the loan.
Real approximates the interest rate after inflation.
Real rate
= Nominal rate − Projected inflation rate
Vacancy losses
Expected lost rent when the property is empty.
Rent × Vacancy rate (as a percent)
Operating income
Income after accounting for empty periods.
Rent
− Vacancy losses
Net operating income (NOI)
Income before mortgage payments.
Operating income
− All property expenses (taxes, insurance, management, maintenance, etc.)
Cash flow
What's left after paying the mortgage. Positive means the property pays for itself.
Net operating income
− Monthly loan payment
Capitalization rate
A quick way to compare similar properties.
Annual net operating income / Purchase price × 100 → %
Debt coverage ratio
How many times your income covers the mortgage. Above 1.0 means income exceeds the payment.
Net operating income / Monthly mortgage payment
Cash on cash return
Shows how hard your money is working.
Annual cash flow / Cash invested × 100 → %
Return on investment
Total return as a percent of what you invested. We also show versions that include Inflation Induced Debt Destruction® (IIDD) and tax benefits.
Gross equity income (cash flow + principal + appreciation) / Cash invested × 100 → %
Return on Investment with IIDD
Return on investment including the benefit of inflation reducing the real value of your debt.
Gross equity income including Inflation Induced Debt Destruction® (IIDD) / Cash invested × 100 → %
Inflation Induced Debt Destruction® (IIDD)
As inflation happens, the real value of your loan balance goes down.
Projected inflation rate (as a percent) × Total loan amount
Loan fees
Fees charged by the lender for the first and second loans. Spread over the life of the loan for tax purposes.
First loan fees + Second loan fees
Closing costs
One-time costs to buy the property (e.g. title, escrow). Counted in your initial investment and in depreciation for taxes.
Gross rent
Total rental income. Year 1 uses your current rent; later years:
Prior year rent × (1 + Rental growth rate)
Operating expenses
All property expenses. In later years each line grows with inflation (management with rental growth).
Property tax + Insurance + Management + Leasing + Association fees + Maintenance + Other
Principal reduction
The part of your mortgage payment that pays down the loan balance each year (not interest). From the first and second loans combined.
Appreciation
Increase in the property's value from one year to the next. Market value grows at your assumed appreciation rate.
This year's market value
− Last year's market value
Gross equity income
The total gain from the property in that year.
Cash flow + Principal paydown + Appreciation
Capitalization rate (10-year)
Uses current value instead of purchase price.
Net operating income / Market value (that year) × 100 → %
Return on equity
Shows how well your equity is performing.
Gross equity income / Equity (market value − loan balance) × 100 → %
Market value
Estimated value each year. Year 1 starts from initial market value.
Prior year's market value × (1 + Appreciation rate)
Loan balance
How much you still owe on the first and second mortgages. It goes down each year as you pay principal.
Equity
Your stake in the property.
Market value
− Loan balance
Loan-to-value ratio
Your loan balance as a percent of the property's value. Lower means you own a bigger share.
Loan balance / Market value × 100 → %
Assumptions
This is a projection from our Local Market Specialists. If you would like to set your own assumptions, sign up at PropertyTracker.com and unlock a suite of investment tools.
Potential cash-out refi
Cash you could take out if you refinanced at the rate shown. Positive result means cash out.
(Refinance loan-to-value % × Market value) + Loan balance
(loan balance is negative)
Closing costs (sale)
Estimated cost to sell (e.g. agent commission, transfer taxes). Shown as a negative.
Closing cost % × Market value
Proceeds after sale
What you'd receive from selling.
Equity + Closing costs of sale
(closing costs are negative)
Cumulative cash flow
Total of all cash flow from year 1 through this year.
Cash flow (year 1) + Cash flow (year 2) + … + Cash flow (this year)
Net profit
If you sold at the end of this year.
Sale proceeds + Cumulative cash flow + Initial cash invested
(initial investment is negative)
Internal rate of return (IRR)
An annual return rate that accounts for when you put money in and when you get it back, including the sale. Calculated from your initial investment and the series of cash flows plus sale proceeds in the chosen year. Good for comparing different investments.
Return on investment (sale)
If you sold at the end of this year.
Net profit / Cash invested × 100 → %
Rents received
Total rental income for the year from your tracker. Times your ownership share if applicable.
Rent + Pet fees + Damage credits + Reimbursements + Other income
Depreciation
Tax deduction for the wear and tear on the building. Special rules for the first year and year of sale (mid-month), and for GO Zone.
Basis / Life (years)
Total expenses (Schedule E)
All expenses for the year for Schedule E.
Actual expenses (operating + mortgage interest + loan fee amortization + other)
+ Depreciation
Net income (or loss)
The number you use for Schedule E on your tax return.
Total income
− Total expenses
Amortization of loan fees
Loan fees spread over the life of the loan. Straight-line over the term; special rules for first year and payoff year. You deduct that portion for tax purposes.
Total loan fees / Loan term (years)
