Business Plan – 1st Draft Analysis; PAGE 7…

Financial Projections

Assuming an $800 per month monthly mortgage payment; owner living off-site; full occupancy/no vacancy; 4-unit bldg…(CHOICE A).

Annual profits: 37,200

Estimated Operating expenses (provided by current owner): $9,840 annual.

Mortgage payments: $9,600 annual.

Property Management/Partner: $6,840 annual (calculated as the amount remaining after deducting operating expenses including taxes).

Break Even Analysis Chart:

*Current operating costs may include property taxes. This cost analysis also includes mortgage loan payments [rough preliminary estimates].

1. Net Operating Income (CHOICE A):37,200 – $9,840 = $27,360

2. Home Value: $365,000 = 27, 360/7% Cap Rate = $390,857.14

3. Debt Service Coverage Ratio: $27,360/$9,600 = 3.85 DSCR

4. Cash Flow: $27,360 – $9,600 = $17,760 (See edits for taxes)

5. Home Cost: $27,360/$340,000 = 8% Cap Rate; $27,360/$360,000 rounds off to 8% Cap Rate.