Cash Flow Analysis Multi-Family Building For Sale Boston, Massachusetts 02215

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1 Property Report Cash Flow Analysis Presented by: Pantheon Property Group 665 Beacon Street, Suite #305 Boston, Massachusetts Office: Mobile: (830) Data Analysis Provided by Pantheon Property Group, LLC 1

2 Overview Cash Flow Analysis Purchase Info Square Feet (4 Units) 3,800 Initial Market Value $870,000 Purchase Price $800,000 Initial Cash Invested $176,000 Income Analysis Monthly Annual Net Operating Income $6,367 $76,407 Cash Flow $2,667 $32,006 Financial Metrics Cap Rate (Purchase Price) 9.6% Cash on Cash Return (Year 1) 18.2% Internal Rate of Return (Year 10) 30.4% Sale Price (Year 10) $1,417,138 This property offers investors a rare opportunity to own a free-standing apartment building in Downtown Boston at a fraction of the usual cost. The property consists of 4 units, so it is eligible for residential financing and more favorable interest rates than a building with 5 units or more. The building is within walking distance to Boston University, BIDMC, Fenway Park, Kenmore Square, and Audubon Circle. The building has also undergone substantial structural repairs in 2010, 2011, and There is still room for cosmetic repairs and renovations that could increase monthly rent and command full market value for the property. Data Analysis Provided by Pantheon Property Group, LLC 2

3 Purchase Analysis Purchase Info Initial Market Value $870,000 Purchase Price $800,000 - First Mortgage ($640,000) - Second Mortgage ($0) = Downpayment $160,000 + Buying Costs $16,000 + Initial Improvements $0 = Initial Cash Invested $176,000 Square Feet (4 Units) 3,800 Cost per Square Foot $211 Monthly Rent per Square Foot $2.40 Cost per Unit $200,000 Average Monthly Rent per Unit $2,278 Mortgages First Second Loan-To-Value Ratio 80% 0% Loan Amount $640,000 $0 Loan Type Amortizing Term 25 Years Interest Rate 5% Payment $3, $0.00 Income Monthly Annual Gross Rent $9,110 $109,320 Vacancy Loss ($364) ($4,373) Laundry $100 $1,200 Operating Income $8,846 $106,147 Expenses (% of Income) Monthly Annual Insurance (3%) ($233) ($2,800) Management Fees (5%) ($417) ($5,000) Repairs (4%) ($375) ($4,500) Taxes (9%) ($810) ($9,714) Utilities (7%) ($619) ($7,426) Pest Control (0%) ($25) ($300) Operating Expenses (28%) ($2,478) ($29,740) Net Performance Monthly Annual Net Operating Income $6,367 $76,407 - Mortgage Payments ($3,700) ($44,401) - Year 1 Improvements ($0) ($0) = Cash Flow $2,667 $32,006 Financial Metrics (Year 1) Annual Gross Rent Multiplier 7.3 Operating Expense Ratio 28.0% Debt Coverage Ratio 1.72 Cap Rate (Purchase Price) 9.6% Cash on Cash Return 18.2% Assumptions Appreciation Rate 5.0% Vacancy Rate 4.0% Income Inflation Rate 3.0% Expense Inflation Rate 3.0% LTV for Refinance 70.0% Selling Costs $60,900 Data Analysis Provided by Pantheon Property Group, LLC 3

4 Buy and Hold Projection Income Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Gross Rent $109,320 $112,600 $115,978 $123,041 $142,638 $191,693 $257,620 Vacancy Loss ($4,373) ($4,504) ($4,639) ($4,922) ($5,706) ($7,668) ($10,305) Laundry $1,200 $1,236 $1,273 $1,351 $1,566 $2,104 $2,828 Operating Income $106,147 $109,332 $112,612 $119,470 $138,498 $186,130 $250,143 Expenses Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Insurance ($2,800) ($2,884) ($2,971) ($3,151) ($3,653) ($4,910) ($6,598) Management Fees ($5,000) ($5,150) ($5,304) ($5,628) ($6,524) ($8,768) ($11,783) Repairs ($4,500) ($4,635) ($4,774) ($5,065) ($5,871) ($7,891) ($10,605) Taxes ($9,714) ($10,005) ($10,306) ($10,933) ($12,675) ($17,034) ($22,892) Utilities ($7,426) ($7,649) ($7,878) ($8,358) ($9,689) ($13,022) ($17,500) Pest Control ($300) ($309) ($318) ($338) ($391) ($526) ($707) Operating Expenses ($29,740) ($30,632) ($31,551) ($33,473) ($38,804) ($52,149) ($70,084) Income Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Net Operating Income $76,407 $78,699 $81,060 $85,997 $99,694 $133,980 $180,059 - Mortgage Payments ($44,401) ($44,401) ($44,401) ($44,401) ($44,401) ($44,401) ($0) - Improvements ($0) ($0) ($0) ($0) ($0) ($0) ($0) = Cash Flow $32,006 $34,298 $36,659 $41,596 $55,293 $89,580 $180,059 Cap Rate (Purchase Price) 9.6% 9.8% 10.1% 10.7% 12.5% 16.7% 22.5% Cap Rate (Market Value) 8.4% 8.2% 8.0% 7.7% 7.0% 5.8% 4.8% Cash on Cash Return 18.2% 19.5% 20.8% 23.6% 31.4% 50.9% 102.3% Return on Equity 11.2% 9.9% 9.0% 7.6% 5.8% 4.2% 4.8% Loan Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Market Value $913,500 $959,175 $1,007,134 $1,110,365 $1,417,138 $2,308,369 $3,760,090 - Loan Balance ($626,590) ($612,511) ($597,727) ($565,904) ($471,337) ($196,602) ($0) = Equity $286,910 $346,664 $409,407 $544,461 $945,802 $2,111,767 $3,760,090 Loan-to-Value Ratio 68.6% 63.9% 59.3% 51.0% 33.3% 8.5% 0.0% Potential Cash-Out Refi $12,860 $58,912 $107,267 $211,351 $520,660 $1,419,257 $2,632,063 Sale Analysis Year 1 Year 2 Year 3 Year 5 Year 10 Year 20 Year 30 Equity $286,910 $346,664 $409,407 $544,461 $945,802 $2,111,767 $3,760,090 - Selling Costs ($63,945) ($67,142) ($70,499) ($77,726) ($99,200) ($161,586) ($263,206) = Proceeds After Sale $222,965 $279,522 $338,908 $466,735 $846,602 $1,950,182 $3,496,884 + Cumulative Cash Flow $32,006 $66,305 $102,964 $183,651 $431,913 $1,165,071 $2,525,080 - Initial Cash Invested ($176,000) ($176,000) ($176,000) ($176,000) ($176,000) ($176,000) ($176,000) = Net Profit $78,971 $169,827 $265,872 $474,387 $1,102,515 $2,939,252 $5,845,964 Internal Rate of Return 44.9% 42.9% 40.4% 36.3% 30.4% 26.0% 24.8% Return on Investment 45% 96% 151% 270% 626% 1,670% 3,322% Data Analysis Provided by Pantheon Property Group, LLC 4

5 Graphs $16,000 Monthly Cash Flow $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $ Year $4,000,000 Loan Balance + Equity = Market Value $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $ Year Internal Rate of Return (IRR) 40% 30% 20% 10% 0% Year Data Analysis Provided by Pantheon Property Group, LLC 5

6 Rent Roll Unit Description Square Feet Units of This Type Rent (Per Unit) Unit # $1,800 Per Month Unit #2 1,100 1 $2,960 Per Month Unit # $2,000 Per Month Unit # $2,350 Per Month Totals for Year 1 Total Number of Units 4 Total Area (Sum of Units) 3,800 Square Feet Total Rent (Sum of Units) $9,110 Per Month, $109,320 Per Year Data Analysis Provided by Pantheon Property Group, LLC 6

7 Photos Data Analysis Provided by Pantheon Property Group, LLC 7