Course Materials

How to Work with Real Estate Investors PART 1                                                                       

By: Tom Lundstedt, CCIM

                         

Section 3: Case Study – Uncle Louie Assumptions 

 

Purchase Cost

•$585,000

Cash Invested

•$126,000

Financing

•$459,000 @ 7%

•P&I = $3,054 per month

• First Year Interest = $31,982

Annual Rent

•$89,550/yr

Vacancy

•10% = $8,955

First Year Operating Expenses

•$36,260

Total First Year Depreciation

•$29,000

Purchase Date

• January

Appreciation

•Zero

Tax Bracket

•35% Combined State and Federal

1

2

3

Section 4: Case Study – Rental House Assumptions 

 

Purchase Cost

•$120,000

Cash Invested

•$25,000

Financing

•$95,000 @ 6%

•P&I = $570 per month

• First Year Interest = $5,668

Annual Rent

•$1,100 per month x 12 = $13,200

Vacancy

•One month vacant

First Year Operating Expenses

•$3,654

Total First Year Depreciation

•$5,080

Purchase Date

• January

Appreciation

•Zero

Tax Bracket

•30% Combined State and Federal

4

5

6

Section 5: Case Study – Pay All Cash for the Rental House Assumptions 

 

Purchase Cost

•$120,000

Cash Invested

•$120,000

Financing

•N/A

•First Year Interst ‐ N/A

Annual Rent

•$13,200

Vacancy

•$1,100

First Year Operating Expenses

•$3,654

Total First Year Depreciation

•$5,080

Purchase Date

•January

Appreciation

•Zero

Tax Bracket

•30% Combined State and Federal

7

8

9

10