Richmond St. E 255 Richmond St E Toronto
2 Bedroom Listed For Sale @ $339,000 Initial Investment $86,919 (25% Down + Land Transfer + Closing) Positive Monthly Cashflow 72% - 5 Year ROI - Net $62,872 Return 201% - 10 Year ROI - Net $174,829 Return
Prepared for
Website Presentation Presented by
Bosley Real Estate Michael Wellstead
169 Danforth Ave.
416-435-6115 michaelw@bosleyrealestate.com
Toronto, Ontario
Michael Wellstead Bosley Real Estate 416-435-6115
Richmond St. E 255 Richmond St E Toronto
Income, Expenses & Cash Flow
Property Overview
Potential Rental Income Other Income Total Vacancy and Credits Operating Expenses Annual Reserves: Net Operating Income (NOI) MIP Payments Annual Reserves: Debt Service:
$
25,200 (8,000)
$ $ $ $ $ $
(13,144)
Cash Flow Before Taxes
$
4,056
$ 339,000 6,675 2,000 -
Total Acquisition Cost
$ 347,675
Mortgage (s)
$ 260,756
Down Payment / Investment
$ 86,919
17,200
-
Income Taxes: Benefit (Expense) @ 0%
Cash Flow After Taxes
Purchase/Asking Price Improvements Other Closing Costs Finance Points
$
Property Type No. of Units Price Per Unit Total Sq Ft Price Per Sq Ft Income per Unit Expenses per Unit
$ $ $ $
Condo 1 347,675 800 435 25,200 (8,000)
4,056
Assumptions
Loan Information
Rental Growth Rate: Expense Growth Rate: Appreciation Rate Marginal Tax Rate: Capital Gain Tax Rate:
2.50% 1.00% 2.00% 0.00% 0.00%
Financial Measurements
Down Payment: $ 86,919 Initial Loan Balance: $ 260,756 Loan Amount Interest Rate $ 260,756 2.99% $ 5.00% $ 4.00%
Year 1
Year 5
Year 10
Debt Coverage Ratio (DCR) Loan-to-Value Ratio (LVR)
1.31 73.8%
1.48 61.9%
1.73 47.9%
Capitalization Rate Based on Cost Capitalization Rate Based on Resale Price
4.95% 4.97%
5.61% 5.21%
6.54% 5.50%
Gross Rent Multiplier
13.45
13.46
13.13
(18,848) (16,682)
(3,640) 9,236
359 26,469
4.67% 4.67%
7.30% 7.30%
11.02% 11.02%
Internal Rate of Return - Before Taxes Internal Rate of Return - After Taxes
12.44% 12.44%
13.56% 13.56%
Modified Internal Rate of Return - Before Taxes Modified Internal Rate of Return - After Taxes
11.50% 11.50%
11.65% 11.65%
Net Present Value (NPV) - B/ Taxes
13.50%
Net Present Value (NPV) - A/Taxes
10.00%
Cash on Cash Return - Before Taxes Cash on Cash Return - After Taxes
% of Asking 25.64% 76.92% Term 30 30 30
% of Cost 25.00% 75.00% Payment $1,095 $0 $0
Notes / Discussion
Disclaimer: All information presented is believed to be accurate. The information, calculations and data presented in this report are believed to be accurate but are not guaranteed. The information contained in this report shall not be considered as a substitution for legal, accounting or other professional advice. Please seek proper legal and tax advice as appropriate before making investments.
Richmond St. E 255 Richmond St E Toronto
Michael Wellstead 416-435-6115
Rental Activity Analysis
Year 1
Potential Rental Income
$
Less: Vacancy & Credit Losses
25,200
Year 2 $
-
Effective Gross Income
$
Less: Operating Expenses
25,200
$
Less: Annual Debt Service
17,200
$
25,830
$
17,750
$
4,606
$
26,476
$
18,315
$
27,138
5,171
$
$
27,138
$
18,895
5,751
27,816 (8,325)
$
(13,144) $
27,816 -
(8,242)
(13,144) $
Year 5
-
(8,161)
(13,144) $
26,476
Year 4
-
(8,080)
(13,144)
CASH FLOW Before Taxes
$
-
(8,000)
Net Operating Income (NOI)
25,830
Year 3
19,491 (13,144)
$
4,056
$
6,347
$
345,780 $ (17,289)
352,696 $ (17,635)
359,750 $ (17,987)
366,945 $ (18,347)
374,283 (18,714)
$
328,491
335,061
341,762
348,597
355,569
Property Resale Analysis Projected Sales Price Less: Selling Expenses Adjusted Projected Sales Price Less: Mortgage(s) Balance Payoff
$
(255,286) $
SALE PROCEEDS Before Taxes
73,205
$
(249,651) $
85,409
$
(243,847) $
97,915
$
(237,868) $
110,730
(231,708) $
123,861
Cash Position Cash Generated in Current Year Cash Generated in Previous Years Cash Generated from Property Sale Original Initial Investment
$
Total Potential CASH Generated
$
4,056 $ n/a 73,205 (86,919) (9,658)
$
4,606 $ 4,056 85,409 (86,919) 7,152
$
5,171 $ 8,661 97,915 (86,919) 24,828
$
5,751 $ 13,832 110,730 (86,919) 43,394
$
6,347 19,583 123,861 (86,919) 62,872
Financial Measurements 1.31
1.35
1.39
1.44
1.48
Loan-to-Value Ratio (LVR)
Debt Coverage Ratio (DCR)
73.8%
70.8%
67.8%
64.8%
61.9%
Capitalization Rate Based on Cost
4.95%
5.11%
5.27%
5.43%
5.61%
Capitalization Rate Based on Resale Price
4.97%
5.03%
5.09%
5.15%
5.21%
Gross Rent Monthly Multiplier (GRM) Gross Rent Yearly Multiplier (GRM) Value of Property Using this GRM
12.00
Break-Even Ratio Operating Expense Ratio
161.43
163.85
163.05
162.26
161.47
13.45 302,400
13.65 309,960
13.59 317,709
13.52 325,652
13.46 333,793
83.91% 31.75%
82.17% 31.28%
80.47% 30.82%
78.81% 30.37%
77.18% 29.93%
(18,848)
(13,470)
(9,267)
(6,045)
(3,640)
Cash-on-Cash Return with Equity Cash-on-Cash Return - Before Taxes
-11.11% 4.67%
22.96% 5.30%
20.70% 5.95%
18.96% 6.62%
17.59% 7.30%
Internal Rate-of-Return (IRR) - Before Taxes
-11.11%
4.13%
9.12%
11.33%
12.44%
Modified Internal Rate-of-Return (MIRR) - Before Taxes
-11.11%
4.03%
8.74%
10.65%
11.50%
Net Present Value (NPV) - Before Taxes
25/02/2013 3:08 PM
13.50%
© 1993 - 2012 Cash Flow Analyzer®
http://RentalSoftware.com
Richmond St. E 255 Richmond St E Toronto
Michael Wellstead 416-435-6115
Rental Activity Analysis
Year 6
Potential Rental Income
$
Less: Vacancy & Credit Losses
28,511
Year 7 $
-
Effective Gross Income
$
Less: Operating Expenses
28,511
$
Less: Annual Debt Service
20,103
$
29,224
$
20,732
$
7,588
$
29,955
$
21,378
$
30,704
8,233
$
$
30,704
$
22,041
8,897
31,471 (8,749)
$
(13,144) $
31,471 -
(8,663)
(13,144) $
Year 10
-
(8,577)
(13,144) $
29,955
Year 9
-
(8,492)
(13,144)
CASH FLOW Before Taxes
$
-
(8,408)
Net Operating Income (NOI)
29,224
Year 8
22,722 (13,144)
$
6,959
$
9,578
$
381,769 $ (19,088)
389,404 $ (19,470)
397,193 $ (19,860)
405,136 $ (20,257)
413,239 (20,662)
$
362,681
369,934
377,333
384,880
392,577
Property Resale Analysis Projected Sales Price Less: Selling Expenses Adjusted Projected Sales Price Less: Mortgage(s) Balance Payoff
$
(225,363)
SALE PROCEEDS Before Taxes
$
(218,827)
$
137,317
$
$
6,959 $ 25,930 137,317 (86,919)
151,107
$
(212,094) $
165,239
$
(205,158) $
179,721
(198,014) $
194,564
Cash Position Cash Generated in Current Year Cash Generated in Previous Years Cash Generated from Property Sale Original Initial Investment Total Potential CASH Generated
$
83,287
$
7,588 $ 32,889 151,107 (86,919)
8,233 $ 40,477 165,239 (86,919)
8,897 $ 48,710 179,721 (86,919)
9,578 57,607 194,564 (86,919)
104,665
127,030
150,409
174,829
$
$
$
Financial Measurements Debt Coverage Ratio (DCR)
1.53
1.58
1.63
1.68
1.73
Loan-to-Value Ratio (LVR)
59.0%
56.2%
53.4%
50.6%
47.9%
Capitalization Rate Based on Cost
5.78%
5.96%
6.15%
6.34%
6.54%
Capitalization Rate Based on Resale Price
5.27%
5.32%
5.38%
5.44%
5.50%
Gross Rent Monthly Multiplier (GRM) Gross Rent Yearly Multiplier (GRM) Value of Property Using this GRM
12.00
Break-Even Ratio Operating Expense Ratio
160.68
159.90
159.12
158.34
157.57
13.39 342,138
13.32 350,691
13.26 359,459
13.20 368,445
13.13 377,656
75.59% 29.49%
74.04% 29.06%
72.51% 28.63%
(1,912)
(742)
(28)
Cash-on-Cash Return with Equity Cash-on-Cash Return - Before Taxes
16.48% 8.01%
15.57% 8.73%
14.80% 9.47%
14.15% 10.24%
13.59% 11.02%
Internal Rate-of-Return (IRR) - Before Taxes
13.03%
13.34%
13.49%
13.55%
13.56%
Modified Internal Rate-of-Return (MIRR) - Before Taxes
11.85%
11.95%
11.92%
11.81%
11.65%
Net Present Value (NPV) - Before Taxes
25/02/2013 3:08 PM
13.50%
71.02% 28.21% 315
© 1993 - 2012 Cash Flow Analyzer®
69.57% 27.80% 359
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