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Cash Flow for Days on this Place!! [Code: 425]

Posted by Powered by Simply Do It on January 4, 2023
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Why THIS deal??
  • Recently updated units (list of unit improvements available)
  • ~$1553/mo cash flow at today's rate of 6.25%
  • ~$1819/mo cash flow when you can refinance to 5.0%
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After 15 Years (no mortgage)
Original purchase price $450,000
Total investment (out of pocket) $135,500
15 yrs Project house value $810,425
Value (appreciation) Gain $360,425
15 yrs cash-flow generated $349,832
Total Gain $710,256
ROI (15 yrs) 524%
ROI (annually) 35%
   
Free & Clear cash flow (yr.) $55,232
Free & Clear cash flow (m) $4,603
  • Large 3 bedroom, 2 bath units in a Multi-Family Home (Quad Plex)
  • Recently renovated units
  • Local agent has reached out for the following information: roof age/condition, plumbing updates, electrical updates, foundation information and HVAC updates
  • No HOA fees
  • This is located in the older part of town, but with good rentability.  We have been conservative on the rental estimates for this opportunity
  • Description says that the laundry facility is on-site in the basement, but pictures show hook-ups in the actual units.  Waiting for clarification on this. 
  • Units are equipped with separate electricity meters.
  • 6 Private off-street parking spots
  • Unit A $1500 (month to month section 8), Unit B $980 (April 2023), Unit C $1200 (June 2023), Unit D $1250 (October 2023)
  •  $4950 (low rent estimate) is what the units are currently rented for.  Upper Estimates are a conservative expectation of what they could be raised to when leases come up for renewal
  • 9,488 square foot lot


Why should you consider this house / what makes it a good investment?

  • Built: 1920
  • Size: 5,852 square foot 
  • Low crime, desirable community


What's next?

Email/text for address, analysis and to get connected to Simply Do It's local team that handles this transaction.

Metro: Kansas City

Team: Meredith – email directly at kc1@simplydoit.net

Code: 425


Property Specifications 4 Per Door
 Bedrooms 13 3
 Bathrooms 8 2.0
 Square Feet 5852 1463
 Year Built 1920  
 Garage Size 0  
 Schools Rating (on scale of A-C) B/C  

Purchase Assumptions My Offer Per Door
Offer used for analysis $450,000 $112,500
Suggested offer (low) $440,000 $110,000
Suggested offer (high) $450,000 $112,500
Asking $450,000 $112,500
Market Value (after improvements) $450,000  
Improvements (lower) $8,000 $2,000
Improvements (upper) $20,000 $5,000
Closing Costs $4,500 $1,125
Mortgage Costs $4,500 $1,125
Other Fees At Closing $0  
Total Cost  $473,000  

Financing Assumptions  
 Down Payment (%) 25%
 Down Payment Amount $112,500
 Financed Amount $337,500
 Interest Rate  (5/6 ARM) Multi-family 6.250%
 Mortgage Term (Years) 30
 Monthly Mortgage Payment $2,078
 Cash Outlay (Total Out of Pocket) $135,500

Financial Assumptions Monthly Yearly
Rent (upper) $5,075 $5,200 $62,400
Rent (lower) $4,950 $59,400
Property Tax Rate (Approx.) 1.4%  
Property Taxes   $300 $3,600
Insurance   $200 $2,400
Repairs   $400 $4,800
Variable-Cost PM   7.0%  
Property Management Fee $355 $4,263
Leasing Fee 68% $142.7 $1,713
HOA   $0 $0
Vacancy Rate   4.0%  
Total Fixed Expenses $1,587 $19,041
 Total Expenses (Fixed + Mortgage) $3,665 $43,978

Financial Analysis / Deal Attractiveness      
Years: 5 10 15 20
 Cap Rate 13.7% 15.4% 17.2% 19.1%
 Net Cash Flow $93,152 $208,976 $349,832 $518,326
 Equity Increase $119,981 $269,308 $455,566 $688,431
 Total Gain $213,133 $478,284 $805,398 $1,206,756
           
 Average Cash Flow/Year $18,630 $20,898 $23,322 $25,916
 Average Cash Flow/Month $1,553 $1,741 $1,944 $2,160
 Average Gain/Year $42,627 $47,828 $53,693 $60,338
 Average ROI 157.3% 353.0% 594.4% 890.6%
 Annual ROI 31.5% 35.3% 39.6% 44.5%
 Projected Property Value $547,494 $666,110 $810,425 $986,005

Property Ratings Suggestions
 Item      Suggested Criteria (Min.) This Property FAVORABLE /
INSUFFICIENT
 Schools     B B/C INSUFFICIENT
 Square Feet     1000 5,852 FAVORABLE
 Bedrooms     3 13 FAVORABLE
 Bathrooms     2 8 FAVORABLE
 Year Built     1970 1920 INSUFFICIENT
 Rent/Price (%)     0.75% 1.16% FAVORABLE
 Average Cash Flow (at year 5)     $125 $1,553 FAVORABLE
 Average ROI (at year 5)     15% 31.5% FAVORABLE

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Disclaimer

Information contained herein was obtained from sources deemed reliable, however, Simply Do It and/or the owner(s) of the property make no guarantees, warranties or representation as to the completeness or accuracy thereof. The presentation of the property is offered subject to errors, omissions, changes in price and/or terms, prior sale or lease or removal from the market for any reason without notice.

The analysis is provided “As Is”. All the information is believed to be accurate (except for the small effects of some simplifying assumptions), but is not guaranteed, and depends on the values entered for the property. This analysis is intended for the purpose of illustrative projections. The information provided is not intended to replace or substitute for any legal, accounting, investment, real estate, tax, or other professional advice, consultation, or service. Simply Do It and/or the owner(s) are not responsible nor liable for any damages arising from the use of the analysis info. 

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