Filetype Excel XLSX | Posted on 16 Aug 2022 | 3 years ago
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221x Filetype XLSX File size 0.05 MB Source: caliberretailproperties.com
Sheet 1: Seller's ROE
| SELLER'S STATEMENT | |||||||||||||||||||||
| Property Facts | Sitting on Money is losing money | ||||||||||||||||||||
| Diminishing Equity Assessment | Need a table to easily show the comparison situation to demonstrate higher rate of return utilizing appropriate leverage | ||||||||||||||||||||
| Most Sellers do NOT raise rents causing the correlation of | Leveraging wit lower interest rates will give investor better return | ||||||||||||||||||||
| Equity to Cash Flow to become low (Diminishing R.O.E.) | |||||||||||||||||||||
| Address | |||||||||||||||||||||
| 33 Cooler Way | |||||||||||||||||||||
| City, Ca | |||||||||||||||||||||
| Gross Building Area | |||||||||||||||||||||
| Land Area | |||||||||||||||||||||
| Parking Ratio | |||||||||||||||||||||
| Coverage | |||||||||||||||||||||
| Yr., Built | |||||||||||||||||||||
| Ownership Type | |||||||||||||||||||||
| Occupancy | |||||||||||||||||||||
| Purchase Date | 6/1/2005 | ||||||||||||||||||||
| Purchase Price | $3,500,000 | Maximum Purchase Price = Max. Equity Investment + Max. Loan Amount. | |||||||||||||||||||
| Plus Acquisition Costs | |||||||||||||||||||||
| Plus Loan Fees / Costs | |||||||||||||||||||||
| Project Cost: | |||||||||||||||||||||
| CAP | SEE CCIM TOOLS | ||||||||||||||||||||
| NOI | |||||||||||||||||||||
| Required ROI | 10.0% | Return on Investment = NOI / Project Cost | |||||||||||||||||||
| Required ROE (Cash on Cash Return) | 7.5% | Return on Equity = Cash Flow / Maximum Equity Investment | |||||||||||||||||||
| Original Equity / Down Payment | Maximum Equity Investment = CF (before taxes) / Reqd. ROE | ; ROE aka Cash On Cash | |||||||||||||||||||
| Loan | |||||||||||||||||||||
| LTV | 7.5% | ||||||||||||||||||||
| DCR | 1.25% | DCR = NOI / Max. ADS | |||||||||||||||||||
| Amort. Schedule | 25 | ||||||||||||||||||||
| Max. Loan Amt. | Maximum Loan Amount = ADS / Constant | ||||||||||||||||||||
| Term | 10 Years | ||||||||||||||||||||
| Interest | 4.65% | ||||||||||||||||||||
| Constant | 4.03% | Constant = ADS / Loan Amount | |||||||||||||||||||
| Ann. Debt Service (ADS) | Maximum Annual Debt Service = NOI / DCR | ||||||||||||||||||||
| Mo. Pmt. | |||||||||||||||||||||
| Current Annual Operating Return | |||||||||||||||||||||
| EFFECTIVE GROSS INCOME | $250,000 | ||||||||||||||||||||
| Less: Absorption & Turnover Vacancy | |||||||||||||||||||||
| Less: Relocation Costs | |||||||||||||||||||||
| Less: Downtime, Concession, Base Rent Abatements | |||||||||||||||||||||
| Scheduled Gross Income | |||||||||||||||||||||
| Plus: Percentage Rent(s) Revenue | |||||||||||||||||||||
| Plus: Misc. Revenue - Parking, Mon. Sign, Wall Sign, ATM, Cell Tower, Charging Station, Kiosk, etc. | |||||||||||||||||||||
| Plus: Recoverable Operating Expenses | |||||||||||||||||||||
| Potential Gross Income | |||||||||||||||||||||
| Less: Vacancy Reserve | 0.05 | (12,500) | ref. Property Mgmt.. Financial Reports | ||||||||||||||||||
| GROSS OPERATING INCOME | 237,500 | ||||||||||||||||||||
| Less: Operating Expenses | 0.35 | (87,500) | ref. Property Mgmt.. Financial Reports | Monitor exclusions: | Real Estate Taxes - Property Insurance - CAM Charges - Mgmt. Fee | ||||||||||||||||
| Less: Taxes | |||||||||||||||||||||
| NET OPERATING INCOME | 150,000 | Off Site Mgmt. - Payroll - Expenses / Benefits - Taxes / Workers Comp. | |||||||||||||||||||
| Less: Leasing & Capital Improvement Expenses | Equipment - Repairs & Maint.. - Utilities - Security - Covid Expenses | ||||||||||||||||||||
| Less: Debt Service | (43,449) | ref. Owner's Mortgage Stmt. | Accounting & Legal - Licenses & Permits - Advertising - Supplies | ||||||||||||||||||
| Pre-Tax Cash Flow | 106,551 | NOI / DCR = Maximum Annual Debt Service | Personal Property Taxes - Misc. Contract Services | ||||||||||||||||||
| Tax (Payable) / Receivable | (12,262) | DCR = NOI / Annual Debt Service | |||||||||||||||||||
| After Tax Cash Flow | 94,289 | ||||||||||||||||||||
| Equity Build-Up (Principal Reduction) | 6,890 | ref. Owner's Mortgage Stmt. | |||||||||||||||||||
| Total After Tax Return | 101,179 | ||||||||||||||||||||
| Gross Operating Income | 237,500 | ||||||||||||||||||||
| Loan Interest | -36,560 | ref. Owner's Mortgage Stmt. | |||||||||||||||||||
| Expenses | (87,500) | ||||||||||||||||||||
| Depreciation | -76282 | ||||||||||||||||||||
| Taxable Income (Loss) | 37,158 | ||||||||||||||||||||
| Tax Bracket Assumed | 0.33 | Owner input | |||||||||||||||||||
| Tax (Payable) / Receivable | 12,262 | ||||||||||||||||||||
| Seller's Net Proceeds | |||||||||||||||||||||
| CASH GENERATED FROM SALE | $5,000,000 | ||||||||||||||||||||
| New Loan Balance | 0.5 | $2,500,000 | Value based upon current market rentals and cap rates - Lease Survey | ||||||||||||||||||
| Existing Loan Balance | $402,434 | ref. Owner's Mortgage Stmt. | |||||||||||||||||||
| Net Loan Funds Generated | $2,097,566 | ||||||||||||||||||||
| Interest in Advance at COE | 0 | ||||||||||||||||||||
| Cash Down Payment | 0.3 | $1,500,000 | |||||||||||||||||||
| Other | |||||||||||||||||||||
| TOTAL CASH GENERATED FROM SALE | $3,597,566 | ||||||||||||||||||||
| EXPENSE OF SALE | If 1 M | If 5 M | |||||||||||||||||||
| Title Policy | 0.04 | ($5,000) | 3,500 | 7,500 | |||||||||||||||||
| Escrow Fee | 0.02 | ($2,500) | 2,500 | 5,000 | split 50/50 between buyer and seller | ||||||||||||||||
| Commission | 0.04 | ($200,000) | |||||||||||||||||||
| Other | 1,000 | 2500 | |||||||||||||||||||
| TOTAL EXPENSE OF SALE | ($207,500) | ||||||||||||||||||||
| NET CASH TO SELLER | $3,390,066 | ||||||||||||||||||||
| NOTES RECEIVABLE | |||||||||||||||||||||
| TOTAL INTEREST RECEIVED FROM NOTE | |||||||||||||||||||||
| TOTAL NET PROCEEDS TO SELLER (Not including Note Interest) | |||||||||||||||||||||
| Seller's Rate of Return On New Equity | |||||||||||||||||||||
| Price | $5,000,000 | ||||||||||||||||||||
| Equity (NET of Selling Expense) | $3,390,066 | ||||||||||||||||||||
| Amount | Type | Rate of Return | |||||||||||||||||||
| 106,551 | PRE - TAX CASH FLOW | 3.14% | |||||||||||||||||||
| 94,289 | AFTER TAX CASH FLOW | 2.78% | |||||||||||||||||||
| 6,890 | EQUITY BUILD-UP (Principal Reduction) | 0.20% | |||||||||||||||||||
| 101,179 | TOTAL AFTER - TAX RETURN (R.O.E.) | 2.98% | |||||||||||||||||||
| BUYER'S STATEMENT | ||||||||
| Buyer ROI Analysis | ||||||||
| Current Rents | Market Rents | 20 % Down / Seller Carry 2nd | ||||||
| KNOW | ||||||||
| GSI | ||||||||
| Price | ||||||||
| Interest Rate | ||||||||
| Debt Service | ||||||||
| Pre-Tax Cash Flow | ||||||||
| ACQUISITION COSTS | ||||||||
| GRM | ||||||||
| Cap Rate | ||||||||
| Purchase Price | ||||||||
| Studies | ||||||||
| Legal | ||||||||
| Closing Costs | ||||||||
| INVESTMENT INFORMATION | ||||||||
| Down Payment | ||||||||
| DCR | ||||||||
| 1st TD | ||||||||
| 2nd TD | ||||||||
| Total Pmts. | ||||||||
| INCOME, EXPENSES, CASH FLOW | ||||||||
| Scheduled Gross Income | ||||||||
| Less: Vacancy Reserve | ||||||||
| Gross Operating Income | ||||||||
| Less: Operating Expenses | ||||||||
| Net Operating Income | ||||||||
| Less: Debt Service | ||||||||
| Debt Cov. Ratio | ||||||||
| Pre-Tax Cash Flow | ||||||||
| Tax (Payable) / Receivable | ||||||||
| After Tax Cash Flow | ||||||||
| Equity Build-Up (Principal Reduction) | ||||||||
| Total After Tax Return | ||||||||
| Gross Operating Income | ||||||||
| Loan Interest | ||||||||
| Expenses | ||||||||
| Depreciation | ||||||||
| Taxable Income (Loss) | ||||||||
| Tax Bracket Assumed | ||||||||
| Tax (Payable) / Receivable | ||||||||
| FINANCIAL INDICATORS |
| Deminishing Return on Equity Analysis (Why Refinance & Acquire # 2?) | ||||||||||||||||
| Address | ||||||||||||||||
| City,State | ||||||||||||||||
| Gross Building Area | 6,000 | |||||||||||||||
| Land Area | ||||||||||||||||
| Parking Ratio | ||||||||||||||||
| Coverage | ||||||||||||||||
| Yr., Built | ||||||||||||||||
| Ownership Type | ||||||||||||||||
| Occupancy | ||||||||||||||||
| Purchase Date | ||||||||||||||||
| Purchase Price | ||||||||||||||||
| Plus Acquisition Costs | ||||||||||||||||
| Plus Loan Fees / Costs | ||||||||||||||||
| Project Cost: | ||||||||||||||||
| CAP | ||||||||||||||||
| NOI | ||||||||||||||||
| Deminishing Return on Equity Analysis (Why Refinance & Acquire # 2?) | ||||||||||||||||
| Subject Property Year of Purchase | Subject Property Today | Subject Property With 65% Leverage | Refinance Subject Property Acquisition # 2 | |||||||||||||
| Estimated Property Value | $1,000,000 | $1,500,000 | $1,500,000 | $1,000,000 | ||||||||||||
| Loan Amount | 600,000 | 502,000 | 800,000 | 700,000 | ||||||||||||
| Cap Rate | 7.00% | 6.50% | 6.50% | 6.50% | ||||||||||||
| Loan To Value % | 60% | 33% | 65% | 70% | ||||||||||||
| Equity | 400,000 | 998,000 | 700,000 | 298,000 | ||||||||||||
| Closing Costs / Rehab | N/A | 0 | 0 | 0 | ||||||||||||
| Interest Rate | 6.00% | 6.00% | 4.50% | 4.50% | ||||||||||||
| Amortization | 360 | 360 | 360 | 360 | ||||||||||||
| Net Operating Income | 75,000 | 100,000 | 100,000 | 75,000 | ||||||||||||
| Debt Service | 43,168 | 43,168 | 48,642 | 42,562 | ||||||||||||
| Pre-Tax Cash Flow | 31,832 | 56,832 | 51,358 | 32,438 | ||||||||||||
| ROE % (Cash on Cash ) | 7.96% | 5.69% | 7.34% | 10.89% | ||||||||||||
| Equity to Pursue Exchange or additional Investment | 298,000 | |||||||||||||||
| COMMENTS | ||||||||||||||||
| Subject: | ||||||||||||||||
| Refinance # 1 | ||||||||||||||||
| Refinance / Acquisition # 2 | ||||||||||||||||
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