Queen Anne Apartment Building: Evaluation

This one is a little more interesting the other MLS leads that I get sent yesterday.  It’s well beyond what I could afford, but it’s still interesting to look at the numbers and find out what we can about them.  The first spreadsheet is your basic Right off the MLS #’s with a 50% cost ratio, the second one has some adjustments:  I figured the rental rates looked a little low ~$200-$400/month, and on new construction, the expense ratio is going to be quite lower, so to find cash flow in the deal I had to dial it down to 20% which came out to about 2/3rds of the listed expense amount:

 

116 Warren
Price $12,875,000.00 Down: $4,291,666.67
Rehab $0.00
Units 18 + 4350sf Commercial
Year 1 Year 2 Year 3 Year 4
GSI $550,620.00 $561,632.40 $572,865.05 $584,322.35
Vacancy $27,531.00 $28,081.62 $28,643.25 $29,216.12
Commercial $169,212.00 $172,596.24 $176,048.16 $179,569.13
$0.00 $0.00 $0.00
GOI $692,301.00 $706,147.02 $720,269.96 $734,675.36
Total Exp $261,544.50 $266,775.39 $272,110.90 $277,553.12
NOI $430,756.50 $439,371.63 $448,159.06 $457,122.24
Mortgage $584,822.67 $584,822.67 $584,822.67 $584,822.67
$0.00 $0.00 $0.00
Free Cash Flow -$154,066.17 -$145,451.04 -$136,663.61 -$127,700.43
DSCR 0.74 0.75 0.77 0.78
Loan Interest Term
$8,583,333.33 5.5 30
$48,735.22 Year 1 Year 2 Year 3 Year 4
Balance $8,583,333.33 $8,583,333.33 $8,583,333.33 $8,583,333.33
Interest Payments $472,083.33 $472,083.33 $472,083.33 $472,083.33
Principal $112,739.34 $112,739.34 $112,739.34 $112,739.34
Projected Cash Flow -$154,066 -$145,451 -$136,664 -$127,700
ROI -0.96% -1.73% -2.28% -2.63%
COC -3.59% -3.39% -3.18% -2.98%
Value @ 5 Cap $8,615,130 $8,787,433 $8,963,181 $9,142,445
Value @ 6.5 Cap $6,627,023 $6,759,564 $6,894,755 $7,032,650
Value @ 10 Cap $4,307,565 $4,393,716 $4,481,591 $4,571,222
ROI @6.5 Cap -$1,956,310.26 -$1,823,769.79 -$1,688,578.52 -$1,550,683.43
ROI on Sale -45.58% -42.50% -39.35% -36.13%
116 Warren
Price $12,875,000.00 Down: $4,291,666.67
Rehab $0.00
Units 18 + 4350sf Commercial
Year 1 Year 2 Year 3 Year 4
GSI $580,800.00 $592,416.00 $604,264.32 $616,349.61
Vacancy $29,040.00 $29,620.80 $30,213.22 $30,817.48
Commercial $169,212.00 $172,596.24 $176,048.16 $179,569.13
$0.00 $0.00 $0.00
GOI $720,972.00 $735,391.44 $750,099.27 $765,101.25
Total Exp $110,352.00 $112,559.04 $114,810.22 $117,106.43
NOI $610,620.00 $622,832.40 $635,289.05 $647,994.83
Mortgage $584,822.67 $584,822.67 $584,822.67 $584,822.67
$0.00 $0.00 $0.00
Free Cash Flow $25,797.33 $38,009.73 $50,466.38 $63,172.16
DSCR 1.04 1.06 1.09 1.11
Loan Interest Term
$8,583,333.33 5.5 30
$48,735.22 Year 1 Year 2 Year 3 Year 4
Balance $8,583,333.33 $8,583,333.33 $8,583,333.33 $8,583,333.33
Interest Payments $472,083.33 $472,083.33 $472,083.33 $472,083.33
Principal $112,739.34 $112,739.34 $112,739.34 $112,739.34
Projected Cash Flow $25,797 $38,010 $50,466 $63,172
ROI 3.23% 6.74% 10.54% 14.64%
COC 0.60% 0.89% 1.18% 1.47%
Value @ 5 Cap $12,212,400 $12,456,648 $12,705,781 $12,959,897
Value @ 6.5 Cap $9,394,154 $9,582,037 $9,773,678 $9,969,151
Value @ 10 Cap $6,106,200 $6,228,324 $6,352,890 $6,479,948
ROI @6.5 Cap $810,820.51 $998,703.59 $1,190,344.33 $1,385,817.88
ROI on Sale 18.89% 23.27% 27.74% 32.29%

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