REAL ESTATE INVESTMENT ANALYSIS
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Enter your numbers in the yellow background boxes only. Some of the columns may show ###### when dealing with a high value property (over $1m.) Just divide your entries by 1,000. Thi Purchase Price: 100,000 Down Payment: 20,000 Interest Rate on Loan: 10.00 Term of Loan: 25 Improvement Ratio: 75 No. Yrs. of Depreciation: 27.5 Scheduled Annual Gross Income:12,000 Vacancy/Collection losses: 5.00 (Annual Operating Expenses) --------Property taxes : 2,000 Insurance: 300 Electricity: 0 Gas: 0 Oil: 0 Water: 0 Trash: 0 Management: 7.00 Repairs/Maintenance: 8.00 Advertising: 200 Telephone: 0 Other: 0 Other: 0 Other: 0 Other: 0
% p.a. yrs. % %age of building to total property value yrs. Straightline for residential. 39.5 years for commercial. %
% of income % of income
Annual Increase of Income: 5.00 Annual Increase of Expenses: 5.00 Annual Appreciation Rate: 5.00 Investor's Tax Bracket: 30.00 Capital Gain Tax Rate: 20.00 CGT Rate on Recaptured Depreciation 25.00 Expected Capital Improvements: 5,000 Approx. Buying Costs: 3.00 Approx. Sales Costs: 7.00
% % % % % % % %
p.a. p.a. p.a.
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This varies depending on the tax payer.
of total of total
RESULTS ACQUISITION DATA Price 100,000 Dn. Pymt. 20,000 Loan Amt. 80,000 Buy Costs 3,000 Cap Impr. 5,000 LOAN DATA Interest % 10.00% No. Yrs. 25 Mo. P & I 727 Yr. P & I 8,724 DEPRECIATION Land 25% Improvement 75% No. Yrs. 27.5 Yr. Depr. 3,018 25,000 83,000
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ANNUAL OPERATING INCOME Increase in income 5.00% Expected Gross Income less Vacancy/Collection losses 5.00% EFFECTIVE GROSS INCOME (EGI)
Yr.1
Yr. 2 5.00% 12,600 630 11,970
Yr. 3 5.00% 13,230 662 12,569
Yr. 4 5.00% 13,892 695 13,197
Yr. 5 5.00% 14,586 729 13,857
Yr. 6 5.00% 15,315 766 14,550
Yr. 7 5.00% 16,081 804 15,277
Yr. 8 5.00% 16,885 844 16,041
Yr. 9 5.00% 17,729 886 16,843
Yr. 10 5.00% 18,616 931 17,685
12,000 600 11,400
ANNUAL OPERATING EXPENSES Yr. 1
Yr. 2
Yr. 3 5.00% 2,205 331 0 0 0 0 0 880 1,005 221 0 0 0 0 4,642 36.93%
Yr. 4 5.00% 2,315 347 0 0 0 0 0 924 1,056 232 0 0 0 0 4,874 36.93%
Yr. 5 5.00% 2,431 365 0 0 0 0 0 970 1,109 243 0 0 0 0 5,117 36.93%
Yr. 6 5.00% 2,553 383 0 0 0 0 0 1,018 1,164 255 0 0 0 0 5,373 36.93%
Yr. 7 5.00% 2,680 402 0 0 0 0 0 1,069 1,222 268 0 0 0 0 5,642 36.93%
Yr. 8 5.00% 2,814 422 0 0 0 0 0 1,123 1,283 281 0 0 0 0 5,924 36.93%
Yr. 9 5.00% 2,955 443 0 0 0 0 0 1,179 1,347 295 0 0 0 0 6,220 36.93%
Yr. 10 5.00% 3,103 465 0 0 0 0 0 1,238 1,415 310 0 0 0 0 6,531 36.93%
(Increase in expenses) 5.00% 5.00% Property Taxes 2,000 2,100 Insurance 300 315 Electricity 0 0 Gas 0 0 Oil 0 0 Water 0 0 Trash 0 0 Management 7.00% 798 838 Repairs/Maintenance 8.00% 912 958 Advertising 200 210 Telephone 0 0 Other 0 0 Other 0 0 Other 0 0 TOTAL OPERATING EXPENSES 4,210 4,421 Op. Expenses as %age of income 36.93% 36.93%
NET OPERATING INCOME (NOI) excluding financing costs
7,190
7,550
7,927
8,323
8,739
9,176
9,635
10,117
10,623
11,154
CASH FLOW (BEFORE TAXES) Net Operating Income -Yrly. P & I CASH FLOW (BEFORE TAXES)
Yr. 1 7,190 8,724 -1,534
Yr. 2 7,550 8,724 -1,174
Yr. 3 7,927 8,724 -797
Yr. 4 8,323 8,724 -400
Yr. 5 8,739 8,724 16
Yr. 6 9,176 8,724 453
Yr. 7 9,635 8,724 912
Yr. 8 10,117 8,724 1,394
Yr. 9 10,623 8,724 1,899
Yr. 10 11,154 8,724 2,431
TAX BENEFIT Net Operating Income -Annual Interest -Annual Depreciation Taxable Income x Investor's Tax Bracket 30.00% TAX BENEFIT
Yr. 1
Yr. 2
Yr. 3 7,927 7,799 3,018 -2,890 30.00% 867
Yr. 4 8,323 7,702 3,018 -2,397 30.00% 719
Yr. 5 8,739 7,595 3,018 -1,874 30.00% 562
Yr. 6 9,176 7,477 3,018 -1,319 30.00% 396
Yr. 7 9,635 7,346 3,018 -729 30.00% 219
Yr. 8 10,117 7,202 3,018 -103 30.00% 31
Yr. 9 10,623 7,043 3,018 562 30.00% -169
Yr. 10 11,154 6,867 3,018 1,269 30.00% -381
7,190 7,550 7,966 7,887 3,018 3,018 -3,794 -3,355 30.00% 30.00% 1,138 1,007
MORTGAGE PRINCIPAL REDUCTIONr. 1 Y Start of Yr. Balance 80,000 -End of Yr. Balance 79,242 TOTAL PRINCIPAL REDUCTION 758
Yr. 2 79,242 78,405 837
Yr. 3 78,405 77,481 925
Yr. 4 77,481 76,459 1,021
Yr. 5 76,459 75,331 1,128
Yr. 6 75,331 74,084 1,247
Yr. 7 74,084 72,707 1,377
Yr. 8 72,707 71,186 1,521
Yr. 9 71,186 69,506 1,681
Yr. 10 69,506 67,649 1,857
PROPERTY APPRECIATION
Yr. 1
Yr. 2
Yr. 3
Yr. 4
Yr. 5 5.00% 121,551 127,628 6,078
Yr. 6
Yr. 7
Yr. 8 5.00% 140,710 147,746 7,036
Yr. 9 5.00% 147,746 155,133 7,387
Yr. 10 5.00% 155,133 162,889 7,757
(Increase) 5.00% 5.00% 5.00% Start of Year Value 100,000 105,000 End of Year Value 105,000 110,250 TOTAL ANNUAL APPRECIATION 5,000 5,250
5.00% 5.00% 110,250 115,763 115,763 121,551 5,513 5,788
5.00% 5.00% 127,628 134,010 134,010 140,710 6,381 6,700
FINANCIAL ANALYSIS RETURN ON INITIAL EQUITY (Assume Initial Equity = Down Payment + Capital Improvement) Yr. 1 Cash Flow (Before Taxes) Tax Benefit Debt Reduction Appreciation $ RETURN ON INITIAL EQUITY INITIAL EQUITY: Down Payment Capital Improvement TOTAL INITIAL EQUITY -1,534 1,138 758 5,000 5,362 Yr. 2 -1,174 1,007 837 5,250 5,920 Yr. 3 -797 867 925 5,513 6,508 Yr. 4 -400 719 1,021 5,788 7,128 Yr. 5 16 562 1,128 6,078 7,784 Yr. 6 453 396 1,247 6,381 8,476 Yr. 7 912 219 1,377 6,700 9,208 Yr. 8 1,394 31 1,521 7,036 9,981
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Yr. 9 1,899 -169 1,681 7,387 10,799
Yr. 10 2,431 -381 1,857 7,757 11,663
20,000 5,000 25,000
20,000 5,000 25,000
20,000 5,000 25,000 26.03%
20,000 5,000 25,000 28.51%
20,000 5,000 25,000 31.14%
20,000 5,000 25,000 33.91%
20,000 5,000 25,000 36.83%
20,000 5,000 25,000 39.93%
20,000 5,000 25,000 43.19%
20,000 5,000 25,000 46.65%
% RETURN ON INITIAL EQUITY 21.45% 23.68%
RETURN ON TOTAL EQUITY (Assume Total Equity = Start of Year Value - Start of Year Loan Balance) Yr. 1 Cash Flow (Before Taxes) Tax Benefit Debt Reduction Appreciation $ RETURN ON TOTAL EQUITY -1,534 1,138 758 5,000 5,362 Yr. 2 -1,174 1,007 837 5,250 5,920 Yr. 3 -797 867 925 5,513 6,508 Yr. 4 -400 719 1,021 5,788 7,128 Yr. 5 16 562 1,128 6,078 7,784 Yr. 6 453 396 1,247 6,381 8,476 Yr. 7 912 219 1,377 6,700 9,208 Yr. 8 1,394 31 1,521 7,036 9,981 Yr. 9 1,899 -169 1,681 7,387 10,799 Yr. 10 2,431 -381 1,857 7,757 11,663
TOTAL EQUITY: Beginning of Year Value inc. Cap. Imp. 105,000 110,000 Begining of Year Balance 80,000 79,242 TOTAL EQUITY 25,000 30,758 % RETURN ON TOTAL EQUITY 21.45% 19.25%
115,250 120,763 78,405 77,481 36,845 43,282 17.66% 16.47%
126,551 76,459 50,091 15.54%
132,628 139,010 75,331 74,084 57,297 64,925 14.79% 14.18%
145,710 72,707 73,003 13.67%
152,746 71,186 81,559 13.24%
160,133 69,506 90,627 12.87%
ESTIMATED SALE PROCEEDS (AFTER EXPENSES & TAXES) Yr. 1 Yr. 2 ADJUSTED COST BASIS Original Basis 103,000 103,000 + Capital Improvements` 5,000 5,000 + Sales Costs 7.00% 7,350 7,718 - Accum. Depreciation 3,018 6,036 = ADJUSTED COST BASIS 112,332 109,681 True CAPITAL GAIN Sales Price Non adjusted cost True Gain or loss CAPITAL GAIN for tax purposes Sales Price - Adjusted Cost Basis CAPITAL GAIN (tax purposes) CAPITAL GAIN TAX Capital Gain for tax purposes = Tax on Capital Gain Yr. 3 Yr. 4 Yr. 5 103,000 5,000 8,934 15,091 101,843 Yr. 6 Yr. 7 Yr. 8 103,000 5,000 10,342 24,145 94,197 Yr. 9 103,000 5,000 10,859 27,164 91,696 Yr. 10 103,000 5,000 11,402 30,182 89,220
103,000 103,000 5,000 5,000 8,103 8,509 9,055 12,073 107,049 104,436
103,000 103,000 5,000 5,000 9,381 9,850 18,109 21,127 99,272 96,722
105,000 110,250 115,350 115,718 -10,350 -5,468
115,763 121,551 116,103 116,509 -341 5,042
127,628 116,934 10,694
134,010 140,710 117,381 117,850 16,629 22,860
147,746 118,342 29,403
155,133 118,859 36,274
162,889 119,402 43,487
105,000 110,250 112,332 109,681 -7,332 569
115,763 121,551 107,049 104,436 8,714 17,115
127,628 101,843 25,785
134,010 140,710 99,272 96,722 34,738 43,988
147,746 94,197 53,549
155,133 91,696 63,437
162,889 89,220 73,669
-7,332
569 416
8,714 2,195
17,115 4,027
25,785 5,912
34,738 7,853
43,988 9,854
53,549 11,917
63,437 14,046
73,669 16,243
EST. NET SALE PROCEEDS (after tax) Sales Price 105,000 110,250 - Sales Costs 7,350 7,718 - Ending Loan Balance 79,242 78,405 = Proceeds Before Taxes 18,408 24,127 - Capital Gain Tax 0 416 = EST NET SALE PROCEEDS A/T 18,408 23,711
115,763 121,551 8,103 8,509 77,481 76,459 30,178 36,583 2,195 4,027 27,983 32,556
127,628 8,934 75,331 43,363 5,912 37,452
134,010 140,710 9,381 9,850 74,084 72,707 50,544 58,153 7,853 9,854 42,691 48,299
147,746 10,342 71,186 66,217 11,917 54,300
155,133 10,859 69,506 74,768 14,046 60,722
162,889 11,402 67,649 83,838 16,243 67,595
You must hold the property for a year and a day to qualify for long term capital gains tax treatment. DEBT SERVICE COVERAGE RATIO (DSC) Yr. 1 Net Operating Income ÷ Debt Service (Yr. P & I) DSC 7,190 8,724 0.82 Yr. 2 7,550 8,724 0.87 Yr. 3 7,927 8,724 0.91 Yr. 4 8,323 8,724 0.95 Yr. 5 8,739 8,724 1.00 Yr. 6 9,176 8,724 1.05 Yr. 7 9,635 8,724 1.10 Yr. 8 10,117 8,724 1.16 Yr. 9 10,623 8,724 1.22 Yr. 10 11,154 8,724 1.28
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Prepared For: Prepared By: You, The XXXr Co. (xxx)xxx-xxxx Property Address: 0
Date:
8/14/2008
This report is based on certain assumptions.The projections are estimates only Anyone using or relying on this report is advised to seek competent legal, financial, and/or tax advice. This spreadsheet is copyright of Mortgage-Investments.Com, Inc. but you are invited to forward this spreadsheet to friends and collegues intact, including the information above. Mortgage-Investments.com Click our link for more free stuff, including a library of useful real estate and mortgage forms and a financial calculator with a tutorial on how to do creative financial calculations.
Investment performance
14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1 2 3 4 5 6 7 8 9 10 years
Dollars
NOI Interest paid Return on Equity
Return on equity includes appreciation, principal reduction and tax benefit.