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REAL ESTATE INVESTMENT ANALYSIS

(Page 1 of 7)

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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 % p.a.
Term of Loan:
25 yrs.
Improvement Ratio:
75 %
%age of building to total property value
No. Yrs. of Depreciation:
27.5 yrs. Straightline for residential.
39.5 years for commercial.
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 % of income
Repairs/Maintenance:
8.00 % of income
Advertising:
200
Telephone:
0
Other:
0
Other:
0
Other:
0
Other:
0
Annual Increase of Income:
5.00 %
p.a.
(Page 2 of 7)

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 Depreciation25.00 %
Expected Capital Improvements:
5,000
Approx. Buying Costs:
3.00 %
Approx. Sales Costs:
7.00 %

p.a.
p.a.
This varies depending on the tax payer.

of total
of total

RESULTS

(Page 3 of 7)

ACQUISITION DATA

LOAN DATA

Price
100,000
Dn. Pymt.
20,000
Loan Amt. 80,000
Buy Costs
3,000
Cap Impr.
5,000

Interest %
No. Yrs.
Mo. P & I
Yr. P & I

10.00%
25
727
8,724

Yr.1

Yr. 2

Yr. 3

Increase in income
5.00%
Expected Gross Income
less Vacancy/Collection losses
5.00%
EFFECTIVE GROSS INCOME
(EGI)

12,000
600
11,400

5.00%
12,600
630
11,970

ANNUAL OPERATING EXPENSES

Yr. 1

(Increase in expenses)
5.00%
Property Taxes
Insurance
Electricity
Gas
Oil
Water
Trash
Management
7.00%
Repairs/Maintenance
8.00%
Advertising
Telephone
Other
Other
Other
TOTAL OPERATING EXPENSES
Op. Expenses as %age of income

ANNUAL OPERATING INCOME

NET OPERATING INCOME

DEPRECIATION
Land
Improvement
No. Yrs.
Yr. Depr.

25%
75%
27.5
3,018

25,000
83,000

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

5.00%
13,230
662
12,569

5.00%
13,892
695
13,197

5.00%
14,586
729
13,857

5.00%
15,315
766
14,550

5.00%
16,081
804
15,277

5.00%
16,885
844
16,041

5.00%
17,729
886
16,843

5.00%
18,616
931
17,685

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

2,000
300
0
0
0
0
0
798
912
200
0
0
0
0
4,210
36.93%

5.00%
2,100
315
0
0
0
0
0
838
958
210
0
0
0
0
4,421
36.93%

5.00%
2,205
331
0
0
0
0
0
880
1,005
221
0
0
0
0
4,642
36.93%

5.00%
2,315
347
0
0
0
0
0
924
1,056
232
0
0
0
0
4,874
36.93%

5.00%
2,431
365
0
0
0
0
0
970
1,109
243
0
0
0
0
5,117
36.93%

5.00%
2,553
383
0
0
0
0
0
1,018
1,164
255
0
0
0
0
5,373
36.93%

5.00%
2,680
402
0
0
0
0
0
1,069
1,222
268
0
0
0
0
5,642
36.93%

5.00%
2,814
422
0
0
0
0
0
1,123
1,283
281
0
0
0
0
5,924
36.93%

5.00%
2,955
443
0
0
0
0
0
1,179
1,347
295
0
0
0
0
6,220
36.93%

5.00%
3,103
465
0
0
0
0
0
1,238
1,415
310
0
0
0
0
6,531
36.93%

7,190

7,550

7,927

8,323

8,739

9,176

9,635

10,117

10,623

11,154

(NOI) excluding financing costs

CASH FLOW (BEFORE TAXES)

Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

Net Operating Income


-Yrly. P & I
CASH FLOW (BEFORE TAXES)

7,190
8,724
-1,534

7,550
8,724
-1,174

7,927
8,724
-797

8,323
8,724
-400

8,739
8,724
16

9,176
8,724
453

9,635
8,724
912

10,117
8,724
1,394

10,623
8,724
1,899

11,154
8,724
2,431

Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

7,190
7,966
3,018
-3,794
30.00%
1,138

7,550
7,887
3,018
-3,355
30.00%
1,007

7,927
7,799
3,018
-2,890
30.00%
867

8,323
7,702
3,018
-2,397
30.00%
719

8,739
7,595
3,018
-1,874
30.00%
562

9,176
7,477
3,018
-1,319
30.00%
396

9,635
7,346
3,018
-729
30.00%
219

10,117
7,202
3,018
-103
30.00%
31

10,623
7,043
3,018
562
30.00%
-169

11,154
6,867
3,018
1,269
30.00%
-381

MORTGAGE PRINCIPAL REDUCTION Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

80,000
79,242
758

79,242
78,405
837

78,405
77,481
925

77,481
76,459
1,021

76,459
75,331
1,128

75,331
74,084
1,247

74,084
72,707
1,377

72,707
71,186
1,521

71,186
69,506
1,681

69,506
67,649
1,857

Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

5.00%
5.00%
100,000 105,000
105,000 110,250
5,000
5,250

5.00%
110,250
115,763
5,513

5.00%
115,763
121,551
5,788

5.00%
121,551
127,628
6,078

5.00%
127,628
134,010
6,381

5.00%
134,010
140,710
6,700

5.00%
140,710
147,746
7,036

5.00%
147,746
155,133
7,387

5.00%
155,133
162,889
7,757

TAX BENEFIT
Net Operating Income
-Annual Interest
-Annual Depreciation
Taxable Income
x Investor's Tax Bracket
TAX BENEFIT

30.00%

Start of Yr. Balance


-End of Yr. Balance
TOTAL PRINCIPAL REDUCTION

PROPERTY APPRECIATION
(Increase)
5.00%
Start of Year Value
End of Year Value
TOTAL ANNUAL APPRECIATION

FINANCIAL ANALYSIS

(Page 5 of 7)

RETURN ON INITIAL EQUITY (Assume Initial Equity = Down Payment + Capital Improvement)
Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

Cash Flow (Before Taxes)


Tax Benefit
Debt Reduction
Appreciation
$ RETURN ON INITIAL EQUITY

-1,534
1,138
758
5,000
5,362

-1,174
1,007
837
5,250
5,920

-797
867
925
5,513
6,508

-400
719
1,021
5,788
7,128

16
562
1,128
6,078
7,784

453
396
1,247
6,381
8,476

912
219
1,377
6,700
9,208

1,394
31
1,521
7,036
9,981

1,899
-169
1,681
7,387
10,799

2,431
-381
1,857
7,757
11,663

INITIAL EQUITY:
Down Payment
Capital Improvement
TOTAL INITIAL EQUITY

20,000
5,000
25,000

20,000
5,000
25,000

20,000
5,000
25,000

20,000
5,000
25,000

20,000
5,000
25,000

20,000
5,000
25,000

20,000
5,000
25,000

20,000
5,000
25,000

20,000
5,000
25,000

20,000
5,000
25,000

21.45%

23.68%

26.03%

28.51%

31.14%

33.91%

36.83%

39.93%

43.19%

46.65%

% RETURN ON INITIAL EQUITY

RETURN ON TOTAL EQUITY (Assume Total Equity = Start of Year Value - Start of Year Loan Balance)
Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

-1,534
1,138
758
5,000
5,362

-1,174
1,007
837
5,250
5,920

-797
867
925
5,513
6,508

-400
719
1,021
5,788
7,128

16
562
1,128
6,078
7,784

453
396
1,247
6,381
8,476

912
219
1,377
6,700
9,208

1,394
31
1,521
7,036
9,981

1,899
-169
1,681
7,387
10,799

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

115,250
78,405
36,845

120,763
77,481
43,282

126,551
76,459
50,091

132,628
75,331
57,297

139,010
74,084
64,925

145,710
72,707
73,003

152,746
71,186
81,559

160,133
69,506
90,627

% RETURN ON TOTAL EQUITY

17.66%

16.47%

15.54%

14.79%

14.18%

13.67%

13.24%

12.87%

Cash Flow (Before Taxes)


Tax Benefit
Debt Reduction
Appreciation
$ RETURN ON TOTAL EQUITY

21.45%

19.25%

ESTIMATED SALE PROCEEDS (AFTER EXPENSES & TAXES)


Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

ADJUSTED COST BASIS


Original Basis
+ Capital Improvements`
+ Sales Costs
7.00%
- Accum. Depreciation
= ADJUSTED COST BASIS

Yr. 1

103,000 103,000
5,000
5,000
7,350
7,718
3,018
6,036
112,332 109,681

103,000
5,000
8,103
9,055
107,049

103,000
5,000
8,509
12,073
104,436

103,000
5,000
8,934
15,091
101,843

103,000
5,000
9,381
18,109
99,272

103,000
5,000
9,850
21,127
96,722

103,000
5,000
10,342
24,145
94,197

103,000
5,000
10,859
27,164
91,696

103,000
5,000
11,402
30,182
89,220

True CAPITAL GAIN


Sales Price
Non adjusted cost
True Gain or loss

105,000 110,250
115,350 115,718
-10,350
-5,468

115,763
116,103
-341

121,551
116,509
5,042

127,628
116,934
10,694

134,010
117,381
16,629

140,710
117,850
22,860

147,746
118,342
29,403

155,133
118,859
36,274

162,889
119,402
43,487

CAPITAL GAIN for tax purposes


Sales Price
- Adjusted Cost Basis
CAPITAL GAIN (tax purposes)

105,000 110,250
112,332 109,681
-7,332
569

115,763
107,049
8,714

121,551
104,436
17,115

127,628
101,843
25,785

134,010
99,272
34,738

140,710
96,722
43,988

147,746
94,197
53,549

155,133
91,696
63,437

162,889
89,220
73,669

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
8,103
77,481
30,178
2,195
27,983

121,551
8,509
76,459
36,583
4,027
32,556

127,628
8,934
75,331
43,363
5,912
37,452

134,010
9,381
74,084
50,544
7,853
42,691

140,710
9,850
72,707
58,153
9,854
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

CAPITAL GAIN TAX


Capital Gain for tax purposes
= Tax on Capital Gain

-7,332

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)

Net Operating Income


Debt Service (Yr. P & I)
DSC

Yr. 1

Yr. 2

Yr. 3

Yr. 4

Yr. 5

Yr. 6

Yr. 7

Yr. 8

Yr. 9

Yr. 10

7,190
8,724
0.82

7,550
8,724
0.87

7,927
8,724
0.91

8,323
8,724
0.95

8,739
8,724
1.00

9,176
8,724
1.05

9,635
8,724
1.10

10,117
8,724
1.16

10,623
8,724
1.22

11,154
8,724
1.28

(Page 7 of 7)
Prepared For:
Prepared By:
Property Address:

You, The XXXr Co. (xxx)xxx-xxxx


0

Date:

6/27/2011

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

Dollars

14,000
12,000
10,000
8,000

Row 92
Row 106
Row 160

6,000
4,000
2,000
0
1

5
years

10

Return on equity includes appreciation, principal reduction and tax benefit.