123 Sample Street - venturacountyrentals.net Sample Street 542 Sampletown Sample, Ca 90000 Potential...

Presidio

805-499-1184

[email protected]

Sample, Ca 90000

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Presidio Real Estate Services1000 Newbury Rd # 170

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Newbury Park

Sample Financial Analysis

123 Sample Street

542 Sampletown

Presidio

805-499-1184

[email protected]

1000 Newbury Rd # 170

Newbury Park

% of P. Price % of CostType Single-Family Total Square Feet 1,650 Down Payment: 125,000$ 29.41% 29.41%Purchase Price 425,000$ Avg. Sq. Ft. Per Unit 1,650Fair Market Value 425,000$ Price Per Sq. Ft. 257.58$ Loan Amount Interest Rate Term PaymentAppreciation Rate 0.00% No. of Units 1 300,000$ 6.50% 30 1,896.20$

Price Per Unit 425,000$ -$ 5.00% 30 -$-$ 5.00% 30 -$

Monthly Rents: 2,200$Annual Rents: 26,400$Other Annual Income: $Annual Vacancy: $Annual Expenses: (6,175)$Annual Reserves: (150)$MIP Payments $Annual Debt Service: (22,754)$

Assumptions:

Rental Growth Rate: 3.00%Expense Growth Rate: 1.00%Appreciation Rate 0.00%Marginal Tax Rate: 36.00%Capital Gain Tax Rate: 23.00%

Year 5Debt Coverage Ratio (DCR) 0.99

Loan-to-Value Ratio (LVR) 57.04% We use a 3.5% annual appreciation rate

Capitalization Rate Based on Cost 5.28%

Capitalization Rate Based on Resale Price 4.56%

Gross Rent Monthly Multiplier (GRM) 204.76

Gross Rent Yearly Multiplier (GRM) 17.06

Net Present Value (NPV) - B/ Taxes 13.50% (38,612)

Net Present Value (NPV) - A/Taxes 10.00% (26,540)

Cash on Cash Return - Before Taxes -0.38%

Cash on Cash Return - After Taxes 2.09%

Internal Rate of Return (IRR) - B/ Taxes 5.73%

Internal Rate of Return (IRR) - A/ Taxes 4.78%

Modified Internal Rate of Return (MIRR) - B/ Taxes 5.74%

Modified Internal Rate of Return (MIRR) - A/ Taxes 4.76%

805-499-1184

542 SampletownSample, Ca 90000

Projected Cash Flow Before Taxes

123 Sample Street

The information, calculations and data presented in this report are believed to be accurate but are not guaranteed. The information contained in this report shall not beconsidered as a substitution for legal, accounting or other professional advice. Please seek proper legal and tax advice as appropriate before making investments.

Disclaimer: All information presented is believed to be accurate.

Income & Expenses

Financial Information

Financial Measurements

Property Information

Summary Description & Notes

Presidio Real Estate Services

www.PresidioRentalSolutions.com

-$4,500

-$4,000

-$3,500

-$3,000

-$2,500

-$2,000

-$1,500

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$0

1 2 3 4 5

Rent increases are assumed to be 3% annuallyVacancies are factored in at 1 month every 2 years

General repairs and maintenance are included in years 3-6-10

At Presidio we help you decipher the numbers behind your investmentsTake the guesswork out of things. Our analysis will help you developa solid strategy for investing in residential real estate.

123 Sample Street


Potential Rental Income 26,400$ 27,192$ 27,736$ 28,291$ 28,856$Less: Vacancy & Credit Losses - - (2,774) - -Less: Operating Expenses (6,175) (6,237) (6,299) (6,362) (6,426)

Net Operating Income (NOI) 20,225$ 20,955$ 18,663$ 21,928$ 22,431$

Less: Annual Debt Service (22,754) (22,754) (22,754) (22,754) (22,754)Less: Funded Reserves (150) (152) (153) (155) (156)

CASH FLOW Before Taxes (2,679)$ (1,951)$ (4,244)$ (981)$ (480)$

Income Taxes: Benefit (Expense) 3,468 3,900 4,641 3,375 3,098

CASH FLOW After Taxes 788$ 1,949$ 396$ 2,395$ 2,618$

Projected Sales Price 425,000$ 437,750$ 459,638$ 475,725$ 492,375$Less: Selling Expenses (29,750) (30,643) (32,175) (33,301) (34,466)

Adjusted Projected Sales Price 395,250$ 407,108$ 427,463$ 442,424$ 457,909$

Less: Mortgage(s) Balance Payoff (296,647) (293,069) (289,252) (285,179) (280,833)

SALE PROCEEDS Before Taxes 98,603$ 114,038$ 138,211$ 157,245$ 177,076$

Income Taxes from Sale: Benefit (Expense) 4,102 (2,132) (12,744) (20,303) (27,985)

SALE PROCEEDS After Taxes 102,705$ 111,906$ 125,467$ 136,942$ 149,091$

Cash Generated in Current Year 788$ 1,949$ 396$ 2,395$ 2,618$Cash Generated in Previous Years n/a 788 2,737 3,133 5,528Cash Generated from Property Sale 102,705 111,906 125,467 136,942 149,091Original Initial Investment (125,000) (125,000) (125,000) (125,000) (125,000)

(21,507)$ (10,357)$ 3,601$ 17,470$ 32,237$

Debt Coverage Ratio (DCR) 0.89 0.92 0.82 0.96 0.99Loan-to-Value Ratio (LVR) 69.8% 66.9% 62.9% 59.9% 57.0%

Capitalization Rate Based on Cost 4.76% 4.93% 4.39% 5.16% 5.28%Capitalization Rate Based on Resale Price 4.76% 4.79% 4.06% 4.61% 4.56%Value of Property Using this Cap Rate 8.00% 252,813 261,941 233,289 274,106 280,383

Net Present Value (NPV) - Before Taxes 13.50% (40,486) (40,351) (37,251) (37,616) (38,612)Net Present Value (NPV) - After Taxes 10.00% (30,915) (30,189) (28,110) (27,207) (26,540)

Cash-on-Cash Return with Equity Build-up -17.21% 10.77% 12.17% 10.78% 10.37%Cash-on-Cash Return - Before Taxes -2.14% -1.56% -3.40% -0.78% -0.38%Cash-on-Cash Return - After Taxes 0.63% 1.56% 0.32% 1.92% 2.09%

Financial Measures

Year 4 Year 5

Cash Position

Rental Activity Analysis

Total Potential CASH Generated

Property Resale Analysis

Year 1 Year 2 Year 3

Presidio805-499-1184

123 Sample Street


Net Operating Income (NOI) from CFA 20,225$ 20,955$ 18,663$ 21,928$ 22,431$Expense Portion of Capital Reserve (38) (38) (38) (39) (39)Tax Depreciation (12,023) (12,545) (12,545) (12,545) (12,545)Tax Depreciation - Reserve/Improvements (4) (8) (12) (16) (21)Interest Expense - Mortgage #1 (17,793) (19,196) (18,958) (18,703) (18,432)

Operating Taxable Income (Loss) (9,632)$ (10,832)$ (12,890)$ (9,375)$ (8,607)$

Federal & State Tax Rate 36.00% 36.00% 36.00% 36.00% 36.00%

Income Tax Benefit (Expense) 3,468$ 3,900$ 4,641$ 3,375$ 3,098$

Subject to Suspended Loss Rules? No

Adjusted Projected Sales Price 395,250$ 407,108$ 427,463$ 442,424$ 457,909$Original Cost of Property (425,000) (425,000) (425,000) (425,000) (425,000)Less: Funded Reserves (113) (226) (341) (457) (574)

Gain (Loss) on Property (29,863)$ (18,119)$ 2,122$ 16,967$ 32,335$

Accumulated Depreciation/Amortization 12,023 24,572 37,126 49,683 62,245Accumulated Dep - Reserve/Improvements 4 8 12 16 21

Total Accumulated Depreciation 12,027$ 24,580$ 37,138$ 49,700$ 62,266$

Taxable Gain (Loss) on Property Sale (17,836)$ 6,462$ 39,260$ 66,667$ 94,601$

Capital Gain & State Rate on Sale 23.00% 23.00% 23.00% 23.00% 23.00%

Income Tax Benefit (Expense) 4,102 (1,486) (9,030) (15,333) (21,758)Recapture Tax - (646) (3,714) (4,970) (6,227)

Income Tax Benefit (Expense) 4,102$ (2,132)$ (12,744)$ (20,303)$ (27,985)$



Tax Analysis - Operations

Tax Analysis - Property Sale

Year 1 Year 2

Year 1 Year 2


123 Sample Street


Per Unit Total Percent of Annual Monthly Annual

Sq. Ft. Sq. Ft. Total Rev/Sq. Ft. Rent Rent

3 Bed 2 Bath Home 1 1,650 1,650 100.00% 16.000 2,200$ 2,200$ 26,400$

Totals 1 1,650 1,650 100.0% 16.000 2,200 2,200$ 26,400$

Unit Description Number ofUnits

Rent PerUnit


123 Sample Street


% of % ofExpenses Revenue

1,200 1.0% 1,200.00$ 19.4% 4.5%300 1.0% 300.00$ 4.9% 1.1%175 1.0% 175.00$ 2.8% 0.7%

4,500 1.0% 4,500.00$ 72.9% 17.0%

6,175$ 6,175.00$ 100.0% 23.4%

Pest Control

AnnualIncrease

Landscaping

Total Annual Operating Expenses


Expense Description AnnualAmount

Maintenance

Per Unit

Property Taxes

123 Sample Street


Year 1 $/Sq Ft Year 2 $/Sq Ft Year 3 $/Sq Ft Year 4 $/Sq Ft Year 5 $/Sq Ft

Potential Rental Income 26,400$ 16.00 27,192$ 16.48 27,736$ 16.81 28,291$ 17.15 28,856$ 17.49

Less: Vacancy & Credit Losses - - - - (2,774) (1.68) - - - -- - - - -

26,400$ 16.00 27,192$ 16.48 24,962$ 15.13 28,291$ 17.15 28,856$ 17.49

26,400$ 16.00 27,192$ 16.48 24,962$ 15.13 28,291$ 17.15 28,856$ 17.49

Landscaping 1,200 0.73 1,212 0.73 1,224 0.74 1,236 0.75 1,249 0.76Maintenance 300 0.18 303 0.18 306 0.19 309 0.19 312 0.19Pest Control 175 0.11 177 0.11 179 0.11 180 0.11 182 0.11Property Taxes 4,500 2.73 4,545 2.75 4,590 2.78 4,636 2.81 4,683 2.84

6,175$ 3.74 6,237$ 3.78 6,299$ 3.82 6,362$ 3.86 6,426$ 3.89

20,225$ 12.26 20,955$ 12.70 18,663$ 11.31 21,928$ 13.29 22,431$ 13.59

Less: Annual Debt Service (22,754) (13.79) (22,754) (13.79) (22,754) (13.79) (22,754) (13.79) (22,754) (13.79)

Less: Funded Reserves (150) (0.09) (152) (0.09) (153) (0.09) (155) (0.09) (156) (0.09)

Cash Flow Before Taxes (2,679)$ (1.62) (1,951)$ (1.18) (4,244)$ (2.57) (981)$ (0.59) (480)$ (0.29)

Gross Operating Income

Presidio

Net Operating Income (NOI)

Total Operating Expenses

Operating Expenses

Effective Rental Income

805-499-1184

3/16/20109:00 AM © 1993- 2009 Cash Flow Analyzer® RentalSoftware.com

Presidio

805-499-1184

123 Sample Street

542 Sampletown

Sample, Ca 90000

-$5,000

-$4,000

-$3,000

-$2,000

-$1,000

$0

$1,000

$2,000

$3,000

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Cash Flow After Taxes

Cash Flow Before Taxes

123 Sample Street

542 SampletownSample, Ca 90000 Presidio

805-499-1184

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

1 2 3 4 5

After Taxes

Before Taxes

© 1993- 2009 Cash Flow Analyzer® RentalSoftware.com

123 Sample Street


805-499-1184

$

$20,000

$40,000

$60,000

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$100,000

$120,000

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1 2 3 4 5

123 Sample Street


805-499-1184

-25.00%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

1 2 3 4 5

IRR After TaxIRR Before Tax

01

1

123 Sample Street


805-499-1184

Time Period Alternative Property Property

Investment After-Taxes Difference Before-Taxes Difference

(after taxes) Value Net Value Net Value

10.00% InitialInvestment 125,000$ 125,000$ 125,000$

Year 1 137,500 103,493 (34,007)$ Alt Investment 95,924 (41,576)$ Alt InvestmentYear 2 151,250 114,643 (36,607) Alt Investment 109,408 (41,842) Alt InvestmentYear 3 166,375 128,601 (37,774) Alt Investment 129,336 (37,039) Alt InvestmentYear 4 183,013 142,470 (40,543) Alt Investment 147,390 (35,622) Alt InvestmentYear 5 201,314 157,237 (44,077) Alt Investment 166,741 (34,573) Alt Investment

AltInvestment

ReturnBetter

InvestmentBetter

Investment

-

50,000

100,000

150,000

200,000

250,000

1 2 3 4 5

Alternative InvestmentSubject Property - After Taxes

123 Sample Street


805-499-1184

Rental Annual Change Annual Change Trapped Return on Hold

Cash Flow in Equity in Net Worth Equity Equity (ROE) Sell

6.00% A B (A + B)

Year 1 788 (22,295) (21,507) 125,000 -17.21% HoldAfter Year Year 2 1,949 9,201 11,149 102,705 10.86% Hold

5 Year 3 396 13,561 13,958 111,906 12.47% HoldYear 4 2,395 11,474 13,869 125,467 11.05% HoldYear 5 2,618 12,149 14,768 136,942 10.78% Hold

RequiredReturn on

EquityTime Period

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

1 2 3 4 5

Return on Equity (ROE)

123 Sample Street - venturacountyrentals.net Sample Street 542 Sampletown Sample, Ca 90000 Potential...

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