8454 Kings Trail Drive Cordova, TN 38016

Property Details

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Property Info

Purchase Price $ 192,500.00
Down Payment $ 38,500.00
Estimated Closing Costs $ 9,625.00
Estimated Rehab Expenses
Coordination Fee $ 3,995.00
Total Out of Pocket $ 52,120.00
Property Management Setup/Misc $ 2,500.00
Year Built 1990
Square Feet 2525
Bedrooms 5
Bathrooms 2.5

Assumptions 

Down Payment 20%
Closing Costs 5%
Interest Rate 5.000%
Property Management Fee 8%
Vacancy/Repairs 10%
Annual Appreciation (YR 1-3) 5%
Annual Appreciation (YR 4-5) 5%
Annual Rent Increase 5%
Closing Costs on Future Sale 7.50%

Financed Income Breakdown

Monthly Rent $ 1,700.00
Monthly Principal & Interest $ 826.71
Montly Taxes $ 230.00
Monthly Insurance $ 70.83
PITI Monthly $ 1,127.54
21.31% AVERAGE ANNUAL RETURN*
10.29% AVERAGE ANNUAL CASH ON CASH**

Income/Expenses

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Gross Rent $ 20,400.00 $ 21,420.00 $ 22,491.00 $ 23,615.55 $ 24,796.33
Taxes $ 2,760.00 $ 2,898.00 $ 3,042.90 $ 3,195.05 $ 3,354.80
Insurance $ 850.00 $ 850.00 $ 850.00 $ 850.00 $ 850.00
HOA $ – $ – $ – $ – $ –
Property Management $ 1,632.00 $ 1,713.60 $ 1,799.28 $ 1,889.24 $ 1,983.71
Vacancy/Repairs $ – $ 2,142.00 $ 2,249.10 $ 2,361.56 $ 2,479.63
Net Operating Income $ 15,158.00 $ 13,816.40 $ 14,549.72 $ 15,319.71 $ 16,128.19
Debt Service $ 9,920.46 $ 9,920.46 $ 9,920.46 $ 9,920.46 $ 9,920.46

Financials

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Net Monthly Cash Flow $ 436.46 $ 336.16 $ 409.35 $ 486.19 $ 566.88
Cap Rate 7.87% 4.91% 4.67% 4.45% 4.24%
Cash on Cash Return 10.05% 7.74% 9.42% 11.19% 13.05%
Principal Reduction $ 2,279.20 $ 4,666.20 $ 7,176.40 $ 9,809.80 $ 12,581.80
Appreciation $ 9,625.00 $ 19,731.25 $ 30,342.81 $ 41,484.95 $ 53,184.20
Profit on Sale $ (11,637.64) $ 4,131.58 $ 21,369.63 $ 40,143.80 $ 55,540.13
ROI -22.33% 7.93% 41.00% 77.02% 106.56%
Total Capital to Re-Invest $ 26,862.36 $ 42,631.58 $ 59,869.63 $ 78,643.80 $ 94,040.13

Glossary of Terms

Taxes Taxes increase by 3% annually.
Principal Reduction The Principal Reduction is calculated cumulatively based off a 30 year ammortization, fixed rate mortgage.
Appreciation The Appreciation value is calculated cumulatively.
Profit on Sale The Profit on the Sale is calculated by taking the market value (Purchase Price and cumulative Appreciation), and subtracting the initial Purchase Price, Closing Costs, Rehab Expenses and Closing Costs on the Future Sale, plus accumulated cash flow plus principal paydown. It is assumed year 5 is the end of the useful life of rehab done in year 1, and a $5000 rehab expense has been added for year 5 for a more detailed rehab associated with selling the home.
Return on Investment (ROI) The Return on Investment is calculated by taking the Profit on the Sale, divided by the initial Total Out of Pocket
Cash on Cash Return The Cash on Cash Return is calculated by dividing the Annual Net Cash Flow by the Total Out of Pocket (TOP).
Cap Rate Cap Rate is calculated by dividing the Net Operating Income by the Purchase Price.
Vacancies/Repairs Vacancy/Repair expenses start in month 18 since the homes are typically rehabbed at the start of year 1. There is $2500 budgeted in the first year for the initial Property Management setup/misc expenses that may or may not occur.
Total Out of Pocket (TOP) The Total Out of Pocket value is calculated by adding the Down Payment, Closing Costs, Rehab Expenses
*The Average Annual Return is calculated by dividing the ROI in year 5 by 5.
**The Average Annual Cash on Cash Return is the average of the Cash on Cash Return over all 5 years the investment is held.
The information and any statistical data contained herein have been obtained from sources which we believe to be reliable, but we do not represent that they are accurate or complete, and they should not be relied upon as such. All opinions expressed and data provided herein are subject to change without notice.   Past performance is no guarantee of future results, and current performance may be lower or higher than the performance data quoted.  Results shown here are not typical, results will vary based upon real estate prices, interest rates, creditworthiness and many other factors.

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