You are on page 1of 13

2521 Kimball St - Scenario Analysis

Seller
Current Finance
Scenario Refi Scenario Scenario

Market Value $250,000 $250,000 $250,000


Mortgage Outstanding 205000 205000 205000
Implied Equity $45,000 $45,000 $45,000

Interest Rate 7.375% 5.250% 7.375%

Mortgage Breakdown
Annual Escrow Expenses
Homeowners Insurance ($1,150.00 ($1,150.00 ($1,150.00
City Taxes -199 -199 -199
Annual Escrow Total ($1,348.87 ($1,348.87 ($1,348.87

Monthly Escrow Expenses:


Homeowners Insurance ($95.83 ($95.83 ($95.83
City Taxes -17 -17 -17
Principal and Interest -1471 -1132 -1471
Monthly Mortgage Payment ($1,583.55 ($1,244.41 ($1,583.55

Current Rent Payment $1,350.00 $1,350.00 $1,350.00

Sale Price - $250,000 $262,500

Seller Financing:
Buyer Downpayment - - $0.00
Buyer Mortgage - - 262500
Interest Rate - - 7.000%
Buyer Mortgage Payment - - $1,700.00

Transaction Costs:
Loan Fees -
Points -
Legal Fees -2000
Transaction Fees - ($3,750.00 ($3,937.50
Appraisal Costs (Buyer) - -400 -400
Transfer Tax - - -5250
Total Transaction Costs $0.00 ($4,150.00 ($11,587.50

Cash Flow Analysis:


Other Expenses - $0.00 -
Contingency Costs - -
Water Bill -50 -50 -
Monthly Cash Flow (Loss) ($283.55 $55.59 $116.45
Cash Flow Per Partner ($141.77 $27.80 $58.23

Implied Buyer Equity ($22,087.50


Implied Seller Equity $40,850.00 $52,250.00

CASH OUT AT CLOSE


Taxes
Refund Security Deposit
Tenant Early Move Out Charge
Net Profit
Net Profit Per Partner

TAX FACTORS

Total Principal and Interest Payments


($17,653.68 ($13,584.00 ($17,653.68
Total Mortgage Interest Paid ($15,500.00 ($11,926.81 ($15,500.00
Taxable Income Deduction $15,500.00 $11,926.81 $15,500.00
Tax Bracket 20% 20% 20%
Total Tax Benefit $3,100.00 $2,385.36 $3,100.00
Tax Benefit Per Partner $1,550.00 $1,192.68 $1,550.00

Interest as a % of Mortgage 87.8%

TOTAL ANNUAL ECONOMIC BENEFIT ($302.55 $3,052.49 $4,497.45


ANNUAL BENEFIT PER PARTNER ($151.28 $1,526.25 $2,248.73
$1,397.45

ANDRE ANALYSIS

Annual Rent Expense ($16,200.00 ($16,200.00 0


Annual Mortgage Expense 0 0 ($20,400.00
Annual Mortgage Interest Paid 0 0 $17,911.28
Tax Benefit 0 0 $3,582.26

Equity Paydown 0 0 $2,488.72


Appreciation Value 0 0 $12,500
TOTAL ANNUAL ECONOMIC BENEFIT($16,200.00 ($16,200.00 ($1,829.02
ANNUAL INCREASE IN NET WORTH $18,029.02
Switches
PMI? 1=Yes, 2=No 1
Owner Mtg 0
Tenant Mtg 0
Trans and Tax Fees on SF? 1
Seller Finance External
+ Refi Purchase
Scenario Scenario Assumptions

$250,000 $250,000
205000 205000 Pricing
$45,000 $45,000 Market Value 250000
MLS Disc to Mkt Price 4%
5.250% - Tenant Disc to Mkt Price -5%

($1,150.00 -
-199 -
($1,348.87 -

($95.83 - Mortgage:
-17 - Existing Mortgage Amt 205000
-1132 - Mortgage Interest Rate 7.375%
($1,244.41 - Mth Rent Pymt 1350
Mth Mtg Pymt 1471.14
$1,350.00 - Annual PMI 1150
Annual Taxes 198.87
$262,500 $240,000 Months in Year 12

Refinancing:
$0.00 - 1 MTH LIBOR 0.25%
262500 - Margin 4%
7.250% - Premium % 0.75%
$1,700.00 - Refinance Fees 1500

-2000
($3,937.50 ($12,000.00
-400 -
-5250 -4800
($11,587.50 ($16,800.00 Seller Financing:
% over Existing Interest -0.375%
% over Refi Interest 2%
- - Buyer Downpayment % 0%
- -
- - Transaction Costs:
$455.59 - Transfer Tax 2%
$227.80 - Legal Fees 2000
Transaction Fees 1.5%
($22,087.50 - Appraisal Costs 400
$50,750.00 -
Monthly Maintenance:
$18,200.00 Water Bill 50
-2730 Repair Contingency % 0%
-2200 Other Expenses % 0%
-1000 Contingency Costs % 5%
$12,270.00
$6,135.00 Realtor Fees 5%
Capital Gains Tax 15%

($13,584.00
($11,926.81 Seller Assist Scenario - Mortgage Payment Analysis
$11,926.81 Base Interest Rate 5.00%
20% Term Months 360
$2,385.36 Loan Amount $262,500.00
$1,192.68 Step Up 0.25%

*
$7,852.49 *
$3,926.25 * SEE WHAT FEES CAN BE WRAPPED INTO MTG VS. CASH
$5,467.13 * DIFFERENCE IN REFINANCING AT HIGHER VALUE
* PMI Insurance/Escrow/Taxes?

Est Ann Appreciation 5%


0
($20,400.00 Add LTV
$17,911.28 Add wrapped up fees 80%
$3,582.26

$2,488.72 Rental Loss Piece


$12,500
($1,829.02
$18,029.02
1132 Bankrate at 5.25%
1700 Tenant Payment

Notes Dre says


Who gets mortgage benefits
Lease to own
Whats the optimal scenario
BASED ON APPRAISAL Lease purchase contract
BASED ON REALTOR EXPERTISE TO MOVE FAST Transaction registered with the title and e
PREMIUM CHARGED FOR CREDIT RISK Get escrow partner and CFA, Attorney
Dre Credit report
security instrument must have fastest for

Next Steps - Dre


Get Appraisal

WILL ELIMINATE PMI REGARDLESS BEFORE 4/1 AFTER APPRAISAL


WILL CHANGE BASED ON APPRAISAL

BEST GUESS - CONTINGENT ON LENDER


BEST GUESS - CONTINGENT ON LENDER
BEST GUESS - CONTINGENT ON LENDER
BOTH SIDES PAY 2% TRANSFER TAX

Use the actual tax levels

Int Rate Monthly Payment


5.000% $1,409.16
5.500% $1,490.45
5.750% $1,531.88
6.000% $1,573.82
6.250% $1,616.26
6.500% $1,659.18
6.750% $1,702.57
7.000% $1,746.42
7.250% $1,790.71
7.500% $1,835.44
7.750% $1,880.58
8.000% $1,926.13
8.250% $1,972.07
8.500% $2,018.40
8.750% $2,065.09
9.000% $2,112.13
9.250% $2,159.52
9.500% $2,207.24
9.750% $2,255.28
10.000% $2,303.63
$1,700

ed with the title and escrow office


nd CFA, Attorney

must have fastest foreclosure


2650 25%
3312.5
39750

$7.27
Income
Unemployment 1600
Norwich 1200
Kimball 1300
4100 12
49200

regency management group in so merset


trendmaker homes management agency
N47