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QuickTime™ and a QuickTime™ and a decompressor decompressor are needed to see this picture. are needed to see this picture. Property Cashflow Analyzer Brought to you by: http://www.chandler-property.com and http://www.BiggerPockets.com Purpose: The Property Analyzer is a tool to evaluate a property's cashflow characteristics. The areas highlighted in green are for the user to enter data. The yellow highlighted cells are automatically calculated. Enter in the basic information of the transaction and the spreadsheet will calculate several common ratios and profitability measures. Values are already entered in certain cells to demonstrate how the spreadsheet works. Type over the green cells with new information to analyze your transaction. Property Information Cost Information Property Name Building Cost $ 875,000 Location Land Cost $ - Type of Property Multi Family 60 units Cost Basis $ 875,000 Size of Property 3.8 acre Less Mortgages $ 612,500 Equals Initial Investment $ 262,500 Amortization Period 15 Ratio Information Loan to Value 70% Mortgage Information Loan Amtz Cashflow / Initial Investment 23% Balance Payment Interest Term Period Cashflow / Assets 7% 1st Mtg $ 612,500 $ (5,336) 6.5% 15 180 CAP Rate 14% Annual # Description (All Figures are Annual) Amount Notes 1 POTENTIAL RENTAL INCOME ###### Total Potential Income if rented 100% 2 Less: Vacancy $ (50,670) Assumed 15% Vacancy Factor 3 EFFECTIVE RENTAL INCOME ###### 4 Plus: Other Income $ 2,800 Other Fees, charges, etc 5 GROSS OPERATING INCOME ###### Total Revenue OPERATING EXPENSES 6 Real Estate Taxes $ 32,086 Property Taxes 7 Personal Property Taxes $ - 8 Property Insurance $ 11,800 9 Off Site Management $ 15,800 10 Payroll $ 5,500 11 Expenses/Benefits $ 6,380 12 Taxes/Worker's Compensation $ - 13 Repairs and Maintenance $ 30,000 14 Utilities $ 42,557 15 Accounting and Legal $ 2,500 16 Licenses/Permits $ 1,500 17 Advertising $ 4,000 18 Supplies $ 4,000 19 Lawn and Grounds Keeping $ 5,000 20 Miscellaneous $ 5,000 21 22 23 24 TOTAL OPERATING EXPENSES ###### Sum of Line 6 thru 23 25 NET OPERATING INCOME ###### 26 Less: Annual Debt Service $ (64,026) Total Mortgage Payments 27 CASH FLOW BEFORE TAXES $ 59,781 28 Add Back: Principal Payments $ 24,214 Principal Paid on Loan 29 - Depreciation $ (58,333) Tax Depreciation on Building 30 TAXABLE NET INCOME (LOSS) $ 25,661 Definitions Loan to Value (LTV) = Loan / Property Value LTV is a measurement of leverage. The higher the LTV, the more leveraged a property. Bank's use this to determine the riskiness of a loan. Generally, banks do not loan above 85% LTV. Net Operating Income (NOI) Total Potential Income - Vacancy = Effective Gross Income - Operating Expenses = NOI NOI measures the profitability of a property by excluding the cost of debt (mortgage). It essentially looks at the profitability of the property if it were paid off. Cap Rate - Net Operating income / Sales Price The Cap Rate is common measurement tool used by real estate professionals to measure the attractiveness of a property. Cap Rate measeures NOI as a percent of Sales Price. The higher the Cap Rate the better. Indicates an area for the user to enter data. Indicates an area that is automatically calculated. NOTE: This spreadsheet provided is best used as a reference and should not be considered a substitute for proper property analysis and should be used at your own risk.
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