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MANZANITA
ST,
HENDERSON,
89014 3
bedroom
2
F
1
H
bath
1544
SF
home
built
in
1984 $
102,900 Asking
price
Notes: 1 2 3
All-cash
purchase
$
1,100
$
343 $
757 $
9,084
$
102,900 8.8% $
180,119 $
77,219
13.1% Rent
(see
page
2
for
comparables) Expenses
(see
page
2
for
detail) Monthly
net
operating
income Yearly
net
income Asking
price
(Investment) Capitalization
Rate
=
net
income
/
asking
price Resale
value
in
year
10
(net
of
8%
liquidation
costs) Profit
from
sale
in
year
10 Internal
Rate
of
Return
4 5 6 Notes: 7 8 9 1 2 3 10 11 12 13 8 14 5 6
30-year fixed $ 102,900 Asking price $ 82,320 Maximum loan $ 20,580 Down payment $ 1,100 $ 343 $ 757 $ 442 $ 315 $ 99 $ 414 $ 4,968 $ 20,580 24.1% $ 113,436 34.1%
Financed purchase
15-year
fixed
$
102,900
$
82,320
$
20,580
4.50% $
1,100 $
343 $
757 $
630 $
127 $
321 $
448 $
5,380 $
20,580
26.1% $
146,466
37.4%
larry@IdealHomeBrokers.com (949)
351-6913
5.00% Investment
loan
interest
rate Rent Expenses Monthly
net
income Payment Monthly
cashflow Principal
amortization
in
payment Cashflow
plus
amortization Yearly
cashflow
plus
amortization Down
payment
(Investment) Cash-On-Cash
Return
=
cashflow
/
down
payment Cash
at
Sale
in
year
10
(profit
plus
amortization) Internal
Rate
of
Return
1
of
4
Notes: 1
Terms
Property Tax Homeowners Insurance Homeowners Association Fees Property Management Fees (% of Gross Rent) Other Expenses Monthly Cash Expenses
1.0% 0.65% varies 8.0% 21.6% 5.0% 4.5% 9.5% 31.2% 68.8% Resale
Date
7/28/11 7/27/11 6/30/11 6/30/11 6/21/11 6/16/11 5/26/11
Reserve
Expenses
20 21
$ 55 Maintenance and Replacement Reserves $ 50 Vacancy and Collection Loss $ 105 Monthly Reserve Expenses $ 343 Total Expenses
Comparable
Resales
371
TIERRA
ST
--
4
bed
3
bath
1544
SF
--
1984
List:
$87500 391
MANZANITA
ST
--
3
bed
3
bath
1364
SF
--
1984
List:
$95000 359
CAVOS
WY
--
3
bed
2
bath
1162
SF
--
1986
List:
$99950 1740
LA
CRUZ
DR
--
3
bed
3
bath
1788
SF
--
1989
List:
$95900 1733
DUARTE
DR
--
3
bed
3
bath
1421
SF
--
1985
List:
$115000 1693
DUARTE
DR
--
4
bed
3
bath
1605
SF
--
1988
List:
$99000 371
MANZANITA
ST
--
3
bed
3
bath
1544
SF
--
1984
List:
$109000
Amount
$
83,000 $
95,500 $
95,000 $
93,900 $
111,000
$
99,000 $
109,000
Comparable
Rentals
383
TIERRA
ST
--
3
bed
3
bath
1544
SF
--
1984
List:
$1095 375
EL
PICO
DR
--
3
bed
3
bath
1605
SF
--
1986
List:
$1175 1721
DUARTE
DR
--
3
bed
3
bath
1770
SF
--
1985
List:
$1100 378
TIERRA
ST
--
3
bed
3
bath
1544
SF
--
1984
List:
$1295 1740
DUARTE
DR
--
3
bed
3
bath
1594
SF
--
1985
List:
$1095 366
CAVOS
WY
--
4
bed
3
bath
1788
SF
--
1986
List:
$1395 372
MANZANITA
ST
--
2
bed
2
bath
1160
SF
--
1984
List:
$1075
Lease Date
Amount
4/20/11 $ 1,095 3/24/11 $ 1,175 11/29/10 $ 1,100 11/9/10 $ 1,250 7/22/10 $ 1,095 8/30/10 $ 1,395 8/27/10 $ 1,075
General
Disclaimer
This
report
represents
the
considered
opinion
of
Ideal
Home
Brokers.
We
make
no
guarantee,
warranty
or
representation
about
it.
Any
projections,
opinions,
assumptions
or
estimates
may
not
represent
the
current
or
future
performance
of
the
property.
You
and
your
advisors
should
conduct
a
careful,
independent
investigation
of
the
property
to
determine
to
your
satisfaction
the
suitability
of
the
property
for
your
needs. Ideal
Home
Brokers Property
Offering
Report
2
of
4
Resale Value
$232,438
$200,000
$195,781 $181,580
$50,000
$- 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
40.0% 35.0% Cash-On-Cash Return 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%
Interest
Ra te
Ideal
Home
Brokers Property
Offering
Report
larry@IdealHomeBrokers.com (949)
351-6913
3 of 4
Notes: Gross
Rent
is
estimated
from
comparable
rentals
or
taken
from
actual
rent
rolls. 1 2 3
Summary
of
expenses
from
page
2 Net
Operating
Income
is
the
rental
income
minus
the
cash
expenses.
This
figure
is
independent
of
taxes
or
financing
which
vary
considerably
from
deal
to
deal.
Many
rental
properties
are
purchased
without
debt,
and
the
Net
Operating
Income
is
necessary
to
compute
the
Capitalization
Rate. The
capitalization
(cap)
rate
is
the
(yearly)
Net
Operating
Income
divided
by
the
purchase
price.
It
is
the
simplest
measure
of
an
investment's
financial
performance,
and
it
provides
a
convenient
comparison
to
competing
investment
alternatives.
A
cap
rate
is
like
an
interest
rate
on
a
checking
account,
a
mutual
fund
return,
or
a
bond
yield.
The
cap
rate
is
inversely
related
to
price;
in
other
words,
high
cap
rates
are
synonymous
with
low
prices
and
visa
versa.
The
cap
rate
an
investor
will
accept
varies
from
person
to
person.
There
is
no
single
appropriate
rate
to
apply
to
value.
Instead,
we
show
a
range
of
values
at
different
cap
rates
to
show
the
current
investment
return
someone
can
expect
from
this
property. The
resale
value
at
in
year
10
assumes
prices
appreciate
strongly
after
the
supply
problems
are
resolved.
(see
page
3). The
Internal
Rate
of
Return
evaluates
the
timing
and
the
amount
of
each
source
of
income
and
calculates
a
rate
which
would
balance
these
various
sources
of
income
with
the
initial
investment.
IRR
is
the
best
method
for
calculating
the
returns
on
investments
with
variable
income. Maximum
loan
based
on
lender
limitations
or
available
cashflow.
Generally
smaller
for
15-year
amortization. The
down
payment
reflects
the
minimum
up-front
investment
required
based
on
financing
limitations. Mortgage
interest
rates
vary
based
on
amortization
schedule.
The
quicker
the
loan
amortizes,
the
lower
the
interest
rate.
The
monthly
payment
is
the
based
on
the
largest
loan
a
lender
offers
that
still
provides
for
positive
cashflow The
monthly
cashflow
shows
the
amount
left
over
after
all
payments
and
reserves
have
been
met.
This
is
the
calculated
principal
amortization
in
the
first
payment.
This
amount
increases
in
subsequent
payments. The
actual
monthly
gain
includes
both
left-over
cashflow
and
amortization
in
the
loan. The
Cash-On-Cash
Return
is
similar
to
a
capitalization
rate
in
that
it
shows
a
return
on
investment,
but
it
is
measured
by
comparing
the
Total
Profit
and
Loss
after
Expenses,
Debt
and
Taxes
and
compares
that
to
the
cash
investment.
This
is
the
important
rate
of
return
for
investors
who
are
not
purchasing
with
all
cash.
As
long
as
debt
is
less
expensive
than
the
cap
rate,
the
cash-on-cash
returns
can
be
magnified
by
increasing
debt.
This
is
an
appropriate
use
of
leverage
to
increase
investment
returns. This
is
the
property
tax
amount
set
by
the
local
jurisdiction. Estimated
homeowners
insurance. Homeowners
association
dues
from
property
investigation. Property
management
fees
vary,
but
8%-10%
of
the
monthly
rent
is
a
common
fee. Monthly
cash
expenses
are
the
actual
outlays
of
cash
each
month
to
support
the
property. Estimated
maintenance
and
replacement
reserves.
These
are
higher
in
single-family
detached
homes
and
in
older
properties. Vacancy
and
Collection
Loss
is
an
allowance
for
tenant
turnover.
5 6 7 8 9 10 11 12 13 14
15 16 17 18 19 20 21
4 of 4