Investors Checklist #102

Property Analysis

Here’s an example of some Property analysis Guidelines, make sure you’re comfortable with the Guidelines YOU use! Mike

1.Price/Square Foot

2.Capitalization Rate

Cap Rate = Net Operating Income/Purchase Price (Value)

*NOI

Gross Rental Income (month)

  • -Vacancy
  • -Real Estate tax
  • -Insurance
  • -Maintenance
  • -Condo/HOA fee

NO PI!

NOI/month x 12 _____________NOI Annually

NOI/Purchase Price (Value) = Cap

3.Rate of Return

Net Income/Investment = RoR

4.Income Approach GRM

Monthly Rent/Value = GRM

285 Lynn Shore Drive Apartment #512, 01902 3 Rooms, 1 Bedroom, 1 F Bath 602 SF (April 17, 2020)

(7%, 30yr Fixed, 20% down = $984.12/month PI)

  1. Price/Square Foot

$184,900. List price/602. SF = $307/SF

There were 26 Sold Listings within 0.50 mile radius & within the past 6 months. $190-392k Average 903SF Average Sale $246,354.

$285./SF

2. Capitalization Rate

Cap rate = Net Income/Value

$2500. monthly rent

-$453. Condo/HOA fee

-$169.62 RE Tax

-$250. Vacancy & Maintenance

$1627.38 NOI/month x 12 = $19,528.56 NOI/year

$19,528.56/$184,900. = .106, 10.6 Cap

(Lower the Cap, Lower the risk, Higher the Cap, Higher the risk)

3. Rate of Return RoR

RoR = Net Income/Investment

$19,528.56/$36,980.00 (20% of $184,900. down payment) = 52.8% Rate of Return.

4. Income Approach – GRM

$2500/month/$184,900. purchase = 0.014 1.4 Gross Rent Multiplier. 1% is good in our area!

5. I like the Debt Service Ratio for quick numbers. It allows me to make Counter offers on the Spot! which is VERY Importante’!

Rent/Debt Service

$2500. rent/$984.12 PI +$435.Condo fee + $169.62 RE tax = 1.56 Quickly shows a bank you can make payments every month, collecting that rent!

 

Last –  don’t forget our “4 Corners of the Box” Mortgage Guidelines

Reserves – 3 months PITI

High FICO credit score

Low LTV Loan to Value

Good DTI Debt to Income ratio

Get looking out there and make your own Good Luck! Mike

 

 

 

 

 

‘1.Price/Square Foot

$565,000./2704 SF = $209/SF

2.Capitalization Rate

$1800 x 3 x 12 =$64,800.

RE Tax = ($4756.)

Insurance = ($1800.)

Vacancy 5% = ($3240.)

Maintenance = ($3240.)

NOI     $51764.

Cap = Net Income/Value

$51,764./$565,000 = 0.092 9.2 Cap Rate

3.Rate of Return

RoR = Net Income/Investment

$51,764./$113,000. (20% down) = 45.8% Rate of Return

4.Income Approach GRM

Value/Monthly Rent = GRM

$565,000./$5600. = 100.89

OR

$5,600./$565,000. = 1% WooHoo!!

By the Bye…

Rents $64,800.

Expenses ($13,036.)

NOI $51,764.

MT ($30,796.) 80%, 5.5%, 30Yr $2,566.46/month

Cash Flow $20,967.

Property used in the Example:

MLS # 72398682 – Sold

Multi Family – 3 Family

15 Dodge St

Beverly, MA: North Beverly,  01915-1712

Essex County

List Price: $569,900

Sale Price: $565,000

Color: GREY

Total Floors: 2 Total Rooms: 13

Total Units: 3 Total Bedrooms: 6

Total Rent: $0 Total Bathrooms: 3f 1h

Grade School: Total Fireplaces: 2

Middle School:

High School:

Directions: Route 1A Near 128

Remarks

Great Value for this charming North Beverly three family , 5 room three bedroom owners unit with Modern Country Kitchen, Featuring granite counters and stainless steel appliances, Beautiful hardwood floors, Formal dining room , 1 and 1/2 baths , Plus 4 room 1 bedroom unit and 3 room 1 bedroom unit, Close to Highway and Downtown, Large lot with fenced in yard and plenty of parking. Separate Utilities

Property Information

Approx. Living Area: 2,704 Sq. Ft. Approx. Acres: 0.2 (8,875 Sq. Ft.) Garage Spaces: 0

Living Area Includes: Heat/Cool Zones: Parking Spaces: 6 Off-Street, Improved Driveway, Stone/Gravel

Living Area Source: Public Record Heat/Cool Units: 3 Approx. Street Frontage: 50 Ft.

Living Area Disclosures:

Disclosures:

Annual Expenses

Heating: Repair & Maintenance: Management: Gross Income:

Gas: Trash Removal: Miscellaneous: Gross Expenses:

Electricity: Sewer: Ann. Prop. Oper. Data: No Net Income:

Water: Insurance: Annual Expense Source:

Unit Descriptions

Unit #1

Rooms: 3 Bedrooms: 1 Bathrooms: 1f 0h Fireplaces: 0 Levels: 1 Floor: 1 Rent: 0 Lease: No

Rooms: Living Room, Kitchen

Appliances: Range

Unit #2

Rooms: 4 Bedrooms: 2 Bathrooms: 1f 0h Fireplaces: 0 Levels: 1 Floor: 1 Rent: 0 Lease: No

Rooms: Living Room, Kitchen

Appliances: Range

Unit #3

Rooms: 6 Bedrooms: 3 Bathrooms: 1f 1h Fireplaces: 1 Levels: 1 Floor: 2 Rent: 0 Lease: No

Rooms: Living Room, Dining Room, Kitchen

Appliances: Range

Features

Area Amenities: Public Transportation, Shopping, Medical Facility, Highway Access, House of Worship, Public School

Basement: Yes Full, Interior Access, Bulkhead

Beach: No

Construction: Frame

Electric: Circuit Breakers, 60 Amps/Less

Energy Features: Insulated Windows

Exterior: Wood

Exterior Features: Porch

Flooring: Wood, Tile, Vinyl, Wall to Wall Carpet, Varies Per Unit

Foundation Size: 26*55

Foundation Description: Fieldstone

Hot Water: Natural Gas, Tank

Lot Description: Level

Road Type: Public

Roof Material: Asphalt/Fiberglass Shingles

Sewer Utilities: City/Town Sewer

Terms: Seller W/Participate

Utility Connections: Varies per Unit

Water Utilities: City/Town Water

Waterfront: No

Water View: No

  Other Property Info

Adult Community: No

Disclosure Declaration: No

Exclusions:

Facing Direction: West

Lead Paint: Unknown

UFFI: No Warranty Features: No

Year Built: 1880 Source: Public Record

Year Built Description: Approximate

Year Round:

Short Sale w/Lndr. App. Req: No

Lender Owned: No

Tax Information

Pin #: M:0054 B:0011 L:

Assessed: $349,700

Tax: $4,756 Tax Year: 2018

Book: 0 Page: 0

Cert:

Zoning Code: R10

Map: Block: Lot:

Market Information

Listing Date: 9/19/2018 Listing Market Time: MLS# has been on for 91 day(s)

Days on Market: Property has been on the market for a total of 91 day(s) Office Market Time: Office has listed this property for 91 day(s)

Expiration Date: Cash Paid for Upgrades:

Original Price: $589,900 Seller Concessions at Closing: $5,000

Off Market Date: 12/18/2018 Financing: FHA

Sale Date: 1/16/2019

Sale Price: $565,000

Offer Date: 12/4/2018         Days to Offer: 76

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