Acquisition
$4,800,000purchase price
$3,600,000 loan · 75.0% LTV
$1,272,000 equity
Nashville, TN · 1998 Build
5-yr hold · 7.5% exit cap
Cap Rate
7.9%
Year 1 NOI / purchase price
IRR (5-yr)
19.4%
Levered, with exit
Cash-on-Cash
7.7%
Year 1 cash flow / equity
Equity Multiple
2.23x
Over 5 years
DSCR
1.35x
NOI / debt service
Break-Even Occ.
78.8%
Required to cover debt
NOI
$378,077
$11,815/unit
Annual Cash Flow
$97,882
NOI − debt service
Total Equity
$1,272,000
LTV
75.0%
Annual Debt Service
$280,194
Expense Ratio
27.5%

Pro Forma

Annual projections · Nominal dollars
YearGPREGIOpExNOIDebt ServiceCash FlowCap RateDSCR
Year 1$537,600$521,344$143,267$378,077$280,194$97,8827.9%1.35x
Year 2$553,728$536,984$146,849$390,135$280,194$109,9418.1%1.39x
Year 3$570,340$553,094$150,520$402,574$280,194$122,3798.4%1.44x
Year 4$587,450$569,687$154,283$415,404$280,194$135,2098.7%1.48x
Year 5$605,074$586,777$158,140$428,637$280,194$148,4438.9%1.53x
Exit Analysis
Sale Price
$5,715,161
Remaining Loan
$3,379,526
Selling Costs
$114,303
Net Proceeds
$2,221,332
Total Profit
$2,835,187

Income & Expense Detail (Year 1)

Income
Gross Potential Rent$537,600
Less Vacancy (6.0%)($32,256)
Other Income$16,000
EGI$521,344
Expenses
Property Tax$48,000
Insurance$18,000
Management (5.0%)$26,067
Maintenance$20,800
CapEx Reserve$16,000
Utilities & Other$14,400
Total OpEx$143,267
NOI$378,077

Scenario Analysis

Adjust assumptions per scenario. All other inputs match the base deal.

Bear
Base
Bull
Exit Cap Rate
Rent Growth / yr
Vacancy Rate
Hold Period
yr
yr
yr
IRR
5.2%
19.4%
30.7%
Cash-on-Cash
6.5%
7.7%
8.5%
Equity Multiple
1.25x
2.23x
3.41x
DSCR (Yr 1)
1.29x
1.35x
1.39x
Exit Sale Price
$4,583,670
$5,715,161
$7,134,515
Net Sale Proceeds
$1,112,471
$2,221,332
$3,612,299
Total Profit
$1,591,843
$2,835,187
$4,337,445
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