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Tuscany Hills
Cap rate= 8%
Cash on cash return= 20%
Positive monthly cash flow= $400
Initial investment= Downpayment= $32,000
Closing costs= $4000 (estimated)
Total Money out of pocket= $36,000
Shevy Akason and Associates Principles:
1) Cap rate of 8%+ using todays numbers, and not less than 5.5% using worst case scenarios
2) We use 5% vacancy as todays baseline, and 10% vacancy to calculate worst case scenario
3) We use todays rental numbers to calculate expected rent and account for rental deprecation of 12.5% to account for worst case scenario
4) We use an interest rate of 5% for those that are buying as a primary residence and 6%- 6.5% for investors
5) We account for lost income in downpayment of 2%
6) We Calculate 1%/year of the purchase price for maintenance reserves
Based upon todays numbers=
Monthly Costs
HOA= $144
Taxes= $300 (Estimated)
Maintenance= $141
Insurance= $61
$646*12= *$7752
*If you hire a property manager your expenses will be higher
Today's market rent= $1775*12= $21,300-5% vacancy= $20,235 Today's Cap rate= $20235- $7752= $12483/ $160,000= 8%
Total cost of ownership using IHB calculator= $1077.32*12= $12,928
$20,235 (Gross income)- $12,928 (total cost of ownership) = $7307 $36,000(initial cash investment)= 20%
Shevy Akason and Associates
"We're not Just Real Estate agents, we're real estate consultants"
Shevy Akason | Realtor | Evergreen Realty
Phone 949.769.1599 | Fax 949.753.0671
findmylandmark.com
The best business compliment that one can receive is a referral.
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