ROI Worksheet Explanation

  1. Suggested Offer Price:
    • MLS Sheet- This is a link to the Realtor multiple listing service with all pertinent information of the property including multiple photos.
    • Sales CMA- This link reflects recent sales that are comparable to the subject property
    • Rental CMA-This link reflects the recent leased properties that are comparable to the subject property
  1.  Property Information: This section provides several aspects about the property at your fingertips.
    • Year Built –  The actual year of construction of the property
    • Square Feet – The square footage of the home often based on tax rolls and appraisals.
    • Bed/Bath/Garage – This section is the number of bedrooms, bathrooms and number car garage
    • Annual Taxes – Current yearly taxes produced by the county tax records that do not include any exemptions such as homestead, disability or over 65.
    • Estimated Rent – Current market rent is derived from a comparative market analysis of recent leased properties.
    • HOA – Home Owner Association If applicable, this amount represents the annual HOA fees for the property (paid by the property owner)
    • Estimated Maintenance Cost – We figure that the property is going to have some maintenance which is figured at 4% of the yearly rental amount.
    • Actual List Price – This is the asking price for the property listed for sale
    • CMA Value Used- This is an analysis of recent sales that are comparable to the subject property
    • Offer Price – This is our suggested amount to give you the best chance of getting the property under contract while providing an acceptable return and cash flow.
    • Repairs – This is an estimated cost of repairs that may be needed to rent the property prior to full inspection and based on our knowledge of the area and repair costs.
    • Closing costs – The estimated cost associated with closing the property such as title company fees, insurance premiums, lender fees, and taxes etc.
    • Net Value – This value is calculated by the difference between market value and list price minus repairs and closing costs.
  1.  Cash on Cash Return Offer Rental (All Cash):
    • Purchase price: This is the price that you pay for the property
    • Repairs: This number is an estimated amount needed to prepare the property for rent. The numbers are based on our knowledge of the area and cost of individual repairs. This amount is estimated prior to full inspections.
    • Closing Costs: This is an estimated cost associated with closing fees, title fees and lender fees.
    • Total initial investment: This amount is the sum of Purchase price, repairs and closing costs
    • Yearly Gross Income: This amount reflect you monthly for a year
    • Yearly HOA: Association If applicable, this amount represents the annual HOA fees for the property (paid by the property owner)
    • Yearly Taxes: This amount is the yearly exempted taxes as reported by the taxing authorities
    • Yearly Insurance Est: This amount is the amount of your yearly home owners insurance.
    • Yearly Management fee: The amount of your Management fee based on collected rental income.
    • Yearly Net Income: This amount is Yearly Gross income subtracted by Yearly HOA, Yearly taxes, Yearly insurance, yearly management fee,
    • Cash on Cash Return: This amount is income divided by initial investment
  1.  Cash Offer Rental Analysis: Buyers wishing to pay cash for their investments will follow this analysis. This section outlines your returns and cash out of pocket.
    • Offer price. This price we feel gives you the best chance at getting the offer accepted and the best return on your money.
    • Repairs: This number is an estimated amount needed to prepare the property for rent. The numbers are based on our knowledge of the area and cost of individual repairs. This amount is estimated prior to full inspections.
    • Taxes: un-exempt taxes per the current year’s county tax rolls and broken into monthly estimated payments.
    • Insurance: based on a monthly payment estimated by the current insurance rates.
    • HOA: Monthly cost of Home Owners association dues paid by the owner and applicable.
    • Management fees: negotiated price based on collected rental income only
    • Vacancy loss: This is estimated loss of rent due to vacancies and estimated days on market for this particular area broken into monthly estimates.
    • Maintenance: This is the estimated costs for maintenance items that could need attention and would be owner responsibility to maintain the property. We have broken this down into a monthly averages.
    • Total: This is the sum of all associated costs
    • Estimated rent: The rental amount is based on current rental analysis in the area as well as our knowledge and experience.   
    • Est. Monthly Cash flow:  This amount is monthly income minus your monthly expenses.
    • Cash out of pocket: This amount includes, closing costs, purchase price and repairs.
    • Rental Return on investment. This is the return percentage of the money you spend vs the monthly income you will receive on the property. This number is affected by the price you pay and the repairs needed. Adjusting the offer price and or repairs needed will increase or decrease your ROI.
  1.  Finance Rehab Analysis:  If you are looking to leverage as much of your money as possible, you may consider financing your rehab dollars with your loan. Currently, this program is only available if you have 4 loans or less financed at any one time (conditions and terms vary).  Your ROI will vary depending on the length of time you hold a portfolio property vs. the associated financing costs, and we’ll be happy to help you decide the best approach!
    • Purchase Price:  This is the price that you pay for the property
    • Rehab amount: Estimated cost for repairs projected for the property
    • Total loan amount: The combined amount of the purchase price and rehab price. This column is only used if you finance your rehab into the loan.
    • Down payment: The amount required for Down Payment for this loan
    • Loan amount: Is the Purchase price minus down payment
    • Interest rate: The annualized cost of credit or debt-capital computed as the percentage ratio of interest to the principal. Each bank can determine its own interest rate on loans You can change the rate in the ROI to your lenders rate to get a better idea of what the investment will yield.
    • Years financed: The number of year you choose to finance the loan. You can change the year on the loan to give you an idea of the monthly payment if you change the number of years you borrow.
    • P&I: The amount of principle and interest payments you will pay based on loan amount, interest you pay on the loan and the number of years you choose to finance.
    • Taxes & Insurance: The taxes are based on the current year annual taxes per county tax rolls, Insurance is also based on current year’s rates. These are divided into a 12 month period to give a monthly cost on the worksheet.
    • HOA: Current annual Home Owners association dues broken into monthly payments. Only of the property is located in an HOA.
    • Management fees: This is a Negotiated price based on collected rental income only.
    • Maintenance: The estimated costs for maintenance items that could need attention and would be owner responsibility to maintain the property. This is broken down into a monthly averages.
    • Vacancy loss: The estimated loss of rent due to vacancies and estimated days on market for this particular area broken into monthly estimates.
    • Total: sum of all costs
    • Estimated rent: The rental amount is based on current rental analysis in the area as well as our knowledge and experience.   
    • Est. Monthly Cash flow: This amount is the monthly income minus your monthly expenses.
    • Cash out of pocket: includes, Down payment, closing costs and repair cost.
    • Rent Ratio: The estimated rent you will receive divided by the purchase price you pay for the property.
    • Return on investment: The return percentage of the money you spend vs the month income you will receive on the property. This number is affected by the price you pay and the repairs needed to be done on the property. Adjusting the offer price and or repairs needed will increase or decrease your ROI.
  1. Finance Rental Analysis:
    • Offer Price: The price that you pay for the property
    • Less Down Payment: The amount required for down payment on this loan (typically 25%)
    • Loan Amount: This amount is the purchase price minus the down payment
    • Interest Rate:. The annualized cost of credit or debt-capital computed as the percentage ratio of interest to the principal. Each bank can determine its own interest rate on loans
    • Years financed: The amount of years you plan to finance the property.
    • P&I: The amount of principle and interest payments you will pay based on loan amount, interest you pay on the loan and the number of years you choose to finance
    • Taxes and Insurance: The taxes are based on the current year annual taxes per county tax rolls, Insurance is also based on current year’s rates. These are divided into a 12 month period to give a monthly cost on the worksheet.
    • HOA: Current annual Home Owners association dues broken into monthly payments. Only of the property is located in an HOA.
    • Management Fee: This is a Negotiated price based on collected rental income only
    • Maintenance: The estimated costs for maintenance items that could need attention and would be owner responsibility to maintain the property. this is broken into monthly averages.
    • Vacancy Loss: The estimated loss of rent due to vacancies and estimated days on market for this particular area broken into monthly estimates
    • Total: The sum of all expenses listed above.
    • Estimated rent: The rental amount is based on current rental analysis in the area as well as our knowledge and experience.
    • Est. Monthly Cash flow: This amount is monthly income minus your monthly expenses
    • Estimated Yearly Cash flow: The amount of yearly income  minus your monthly expense
    • Possible Monthly cash flow: The amount of cash flow if you don’t experience vacancy loss or maintenance expenses.
    • Cash Out of Pocket: This amount includes, closing costs, purchase price and repairs.
    • Rent Ratio: The estimated rent you will receive divided by the purchase price you pay for the property.
    • Rental Return on Investment: This is the return percentage of the money you spend vs the monthly income you will receive on the property. This number is affected by the price you pay and the repairs needed. Adjusting the offer price and or repairs needed will increase or decrease your ROI.