2402 Poco Street Investment Analysis

Posted by Joe Manausa on Wednesday, July 7th, 2010 at 12:07pm.

2402 Poco Street Investment Analysis shows an expected Internal Rate of Return (IRR) of 23.5%/

Property Acquisition Report

2402 Poco Street


This report shows the projected cash requirement for acquisition of the 2402 Poco Street on 1 January 2011.
Cost of Property Acquired
Price of Property $129,000
+ Closing Costs (2%) 2,580
Total Cost of Property Acquired $131,580
Property Financing
Acquisition Loan Loan Principal $103,200
- Points (1.5 Points) 1,548
Acquisition Loan Loan Proceeds $101,652
Total Net Loan Proceeds 101,652
Cash Required at Acquisition $29,928


Real Estate Investment Analysis

2402 Poco Street


Buy 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sell Total
Before Tax Cash Flow Projection
Investment and Sale (131,580) 0 0 0 0 0 0 0 0 0 0 161,229 29,649
Effective Income 0 19,440 20,218 21,026 21,867 22,742 23,652 24,598 25,582 26,605 27,669 0 233,399
Operating Expense 0 (8,792) (9,006) (9,227) (9,453) (9,686) (9,925) (10,171) (10,424) (10,683) (10,950) 0 (98,318)
Cash Flow Before Debt (131,580) 10,649 11,211 11,800 12,414 13,056 13,726 14,427 15,158 15,922 16,719 161,229 164,730
Debt Service 101,652 (7,425) (7,425) (7,425) (7,425) (7,425) (7,425) (7,425) (7,425) (7,425) (7,425) (86,363) (58,960)
Cash Flow Before Tax (29,928) 3,224 3,787 4,375 4,989 5,631 6,301 7,002 7,733 8,497 9,294 74,866 105,770
Taxable Income Projection
Taxable Revenue 0 19,440 20,218 21,026 21,867 22,742 23,652 24,598 25,582 26,605 27,669 0 233,399
Taxable Expense 0 (8,792) (9,006) (9,227) (9,453) (9,686) (9,925) (10,171) (10,424) (10,683) (10,950) 0 (98,318)
Interest Expense 0 (6,209) (6,131) (6,048) (5,960) (5,866) (5,767) (5,662) (5,550) (5,431) (5,305) (1,032) (58,960)
Depreciation 0 (3,731) (3,893) (3,893) (3,893) (3,893) (3,893) (3,893) (3,893) (3,893) (3,731) 0 (38,610)
Ordinary Income 0 708 1,187 1,858 2,561 3,296 4,066 4,872 5,715 6,597 7,683 (1,032) 37,511
After Tax Cash Flow Projection
Cash Flow Before Tax (29,928) 3,224 3,787 4,375 4,989 5,631 6,301 7,002 7,733 8,497 9,294 74,866 105,770
Ordinary Income 0 708 1,187 1,858 2,561 3,296 4,066 4,872 5,715 6,597 7,683 (1,032) 37,511
Capital Gains 0 0 0 0 0 0 0 0 0 0 0 68,260 68,260
Taxable Income 0 708 1,187 1,858 2,561 3,296 4,066 4,872 5,715 6,597 7,683 67,228 105,770
Taxes 0 (220) (368) (576) (794) (1,022) (1,260) (1,510) (1,772) (2,045) (2,382) (15,262) (27,211)
Cash Flow After Tax (29,928) 3,004 3,419 3,799 4,195 4,609 5,041 5,492 5,961 6,452 6,912 59,604 78,560
Rate of Return Before Debt (IRR) 11.7%
Rate of Return Before Tax (IRR) 23.5%
Rate of Return After Tax (IRR) 19.6%
Net Present Value Before Debt @10% 14,326
Net Present Value Before Tax @10% 34,814
Net Present Value After Tax @10% 22,414

IRR Verification Report

2402 Poco Street


These cash flows and dates are those on which the Rate of Return Before Tax in our analysis of the 2402 Poco Street are based.

Our Analysis plans operating cash flows monthly, and assumes that cash flows occuring during the month all occur at the middle of the month.Calculators and Spreadsheets typically schedule these cash flows at the end of the year (year-end convention).Since cash flows do actually occur unevenly during the year, the mid-month convention is more accurate.

The Internal Rate of Return (IRR) is defined as the Present Value Discount Rate which makes the Net Present Value of the Cash Flows involved equal to zero. The Net Present Value of $0.00 shown below demonstrates that the Net Present Value of these Cash Flows is very close to zero when discounted at 23.4932% and, in turn, the IRR of the Cash Flows is very close to 23.4932%.


Date Years Cash Flow Present Value Discount Factor Present Value at 23.4932%
1 Jan 2011 0.00 ($29,928.00) 1.0000000 ($29,928.00)
15 Jan 2011 0.04 269.00 0.9919389 266.83
15 Feb 2011 0.12 269.00 0.9743199 262.09
15 Mar 2011 0.20 269.00 0.9586750 257.88
15 Apr 2011 0.28 269.00 0.9416468 253.30
15 May 2011 0.37 269.00 0.9254560 248.95
15 Jun 2011 0.45 269.00 0.9090178 244.53
15 Jul 2011 0.53 269.00 0.8933880 240.32
15 Aug 2011 0.62 269.00 0.8775194 236.05
15 Sep 2011 0.70 269.00 0.8619327 231.86
15 Oct 2011 0.79 269.00 0.8471125 227.87
15 Nov 2011 0.87 269.00 0.8320659 223.83
15 Dec 2011 0.95 269.00 0.8177592 219.98
15 Jan 2012 1.04 316.00 0.8032339 253.82
15 Feb 2012 1.12 316.00 0.7889667 249.31
15 Mar 2012 1.20 316.00 0.7758495 245.17
15 Apr 2012 1.29 316.00 0.7620687 240.81
15 May 2012 1.37 316.00 0.7489655 236.67
15 Jun 2012 1.45 316.00 0.7356622 232.47
15 Jul 2012 1.54 316.00 0.7230131 228.47
15 Aug 2012 1.62 316.00 0.7101707 224.41
15 Sep 2012 1.71 316.00 0.6975565 220.43
15 Oct 2012 1.79 316.00 0.6855626 216.64
15 Nov 2012 1.87 316.00 0.6733855 212.79
15 Dec 2012 1.96 316.00 0.6618072 209.13
15 Jan 2013 2.04 365.00 0.6500520 237.27
15 Feb 2013 2.13 365.00 0.6385056 233.05
15 Mar 2013 2.20 365.00 0.6282530 229.31
15 Apr 2013 2.29 365.00 0.6170938 225.24
15 May 2013 2.37 365.00 0.6064834 221.37
15 Jun 2013 2.45 365.00 0.5957109 217.43
15 Jul 2013 2.54 365.00 0.5854681 213.70
15 Aug 2013 2.62 365.00 0.5750689 209.90
15 Sep 2013 2.71 365.00 0.5648544 206.17
15 Oct 2013 2.79 365.00 0.5551422 202.63
15 Nov 2013 2.87 365.00 0.5452816 199.03
15 Dec 2013 2.96 365.00 0.5359060 195.61
15 Jan 2014 3.04 416.00 0.5263871 218.98
15 Feb 2014 3.13 416.00 0.5170373 215.09
15 Mar 2014 3.20 416.00 0.5087351 211.63
15 Apr 2014 3.29 416.00 0.4996988 207.87
15 May 2014 3.37 416.00 0.4911069 204.30
15 Jun 2014 3.45 416.00 0.4823838 200.67
15 Jul 2014 3.54 416.00 0.4740896 197.22
15 Aug 2014 3.62 416.00 0.4656687 193.72
15 Sep 2014 3.71 416.00 0.4573974 190.28
15 Oct 2014 3.79 416.00 0.4495328 187.01
15 Nov 2014 3.87 416.00 0.4415481 183.68
15 Dec 2014 3.96 416.00 0.4339560 180.53
15 Jan 2015 4.04 469.00 0.4262480 199.91
15 Feb 2015 4.13 469.00 0.4186769 196.36
15 Mar 2015 4.20 469.00 0.4119541 193.21
15 Apr 2015 4.29 469.00 0.4046369 189.77
15 May 2015 4.37 469.00 0.3976795 186.51
15 Jun 2015 4.45 469.00 0.3906158 183.20
15 Jul 2015 4.54 469.00 0.3838995 180.05
15 Aug 2015 4.62 469.00 0.3770806 176.85
15 Sep 2015 4.71 469.00 0.3703828 173.71
15 Oct 2015 4.79 469.00 0.3640143 170.72
15 Nov 2015 4.87 469.00 0.3575486 167.69
15 Dec 2015 4.96 469.00 0.3514009 164.81
15 Jan 2016 5.04 525.00 0.3451592 181.21
15 Feb 2016 5.13 525.00 0.3390284 177.99
15 Mar 2016 5.21 525.00 0.3333918 175.03
15 Apr 2016 5.29 525.00 0.3274700 171.92
15 May 2016 5.37 525.00 0.3218394 168.97
15 Jun 2016 5.46 525.00 0.3161228 165.96
15 Jul 2016 5.54 525.00 0.3106873 163.11
15 Aug 2016 5.62 525.00 0.3051688 160.21
15 Sep 2016 5.71 525.00 0.2997484 157.37
15 Oct 2016 5.79 525.00 0.2945944 154.66
15 Nov 2016 5.88 525.00 0.2893618 151.91
15 Dec 2016 5.96 525.00 0.2843864 149.30
15 Jan 2017 6.04 583.00 0.2793351 162.85
15 Feb 2017 6.13 583.00 0.2743735 159.96
15 Mar 2017 6.21 583.00 0.2699678 157.39
15 Apr 2017 6.29 583.00 0.2651726 154.60
15 May 2017 6.37 583.00 0.2606131 151.94
15 Jun 2017 6.46 583.00 0.2559841 149.24
15 Jul 2017 6.54 583.00 0.2515826 146.67
15 Aug 2017 6.62 583.00 0.2471140 144.07
15 Sep 2017 6.71 583.00 0.2427247 141.51
15 Oct 2017 6.79 583.00 0.2385512 139.08
15 Nov 2017 6.88 583.00 0.2343140 136.61
15 Dec 2017 6.96 583.00 0.2302852 134.26
15 Jan 2018 7.04 644.00 0.2261948 145.67
15 Feb 2018 7.13 644.00 0.2221771 143.08
15 Mar 2018 7.21 644.00 0.2186095 140.78
15 Apr 2018 7.29 644.00 0.2147265 138.28
15 May 2018 7.37 644.00 0.2110345 135.91
15 Jun 2018 7.46 644.00 0.2072861 133.49
15 Jul 2018 7.54 644.00 0.2037219 131.20
15 Aug 2018 7.62 644.00 0.2001034 128.87
15 Sep 2018 7.71 644.00 0.1965491 126.58
15 Oct 2018 7.79 644.00 0.1931696 124.40
15 Nov 2018 7.88 644.00 0.1897385 122.19
15 Dec 2018 7.96 644.00 0.1864761 120.09
15 Jan 2019 8.04 708.00 0.1831638 129.68
15 Feb 2019 8.13 708.00 0.1799104 127.38
15 Mar 2019 8.21 708.00 0.1770216 125.33
15 Apr 2019 8.29 708.00 0.1738773 123.11
15 May 2019 8.37 708.00 0.1708876 120.99
15 Jun 2019 8.46 708.00 0.1678523 118.84
15 Jul 2019 8.54 708.00 0.1649662 116.80
15 Aug 2019 8.62 708.00 0.1620360 114.72
15 Sep 2019 8.71 708.00 0.1591579 112.68
15 Oct 2019 8.79 708.00 0.1564213 110.75
15 Nov 2019 8.88 708.00 0.1536429 108.78
15 Dec 2019 8.96 708.00 0.1510011 106.91
15 Jan 2020 9.04 774.00 0.1483190 114.80
15 Feb 2020 9.13 774.00 0.1456845 112.76
15 Mar 2020 9.21 774.00 0.1432624 110.89
15 Apr 2020 9.29 774.00 0.1407178 108.92
15 May 2020 9.38 774.00 0.1382982 107.04
15 Jun 2020 9.46 774.00 0.1358417 105.14
15 Jul 2020 9.54 774.00 0.1335060 103.33
15 Aug 2020 9.63 774.00 0.1311347 101.50
15 Sep 2020 9.71 774.00 0.1288054 99.70
15 Oct 2020 9.79 774.00 0.1265907 97.98
15 Nov 2020 9.88 774.00 0.1243422 96.24
15 Dec 2020 9.96 774.00 0.1222042 94.59
31 Dec 2020 10.01 74,866.00 0.1210791 9,064.70
TOTALS $105,766.00 $0.00

Do You Want To Invest Like The "Big Guns?"

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Joe Manausa, MBA is a 26 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.

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