3. Analysis
I. Gross Operating Income
Gross Operating Income
minus:
Total Operating Expenses
equals:
Net Operating Income(NOI)
minus:
Annual Debt Service
equals:
Cash Flow Before Tax(CFBT)
II. Annual Debt Service
Annual Debt Service
minus:
Annual Interest
equals:
Principle Reduction
III. Net Operating Income
Net Operating Income(NOI)
minus:
Annual Interest
minus:
Total Depreciation
equals:
Taxable Income
multiply by:
Tax Bracket (Fed28%+State7%)
35%
equals:
Tax Paid or Write Off
IV. Appreciation (estimate)
Cost of Property
multiply by:
Annual Projected Increase
1%
equals:
First Year Appreciation
4. Return On Investment
I. Capitalization Rate (Cap Rate)
Net Operating Income
divided by:
Purchase Cost
equals:
%
II. Cash on Cash
Cash Flow Before Tax
divided by:
Cash Invested
equals:
%
III. ROI Without Appreciation
Cash Flow Before Tax
plus:
Principle Reduction
plus:
Tax Saved
divided by:
Cash Invested
equals:
%
IV. ROI With Appreciation
Cash Flow Before Tax
plus:
Principle Reduction
plus:
Tax Saved
plus:
First Year Appreciation
divided by:
Cash Invested
equals:
%
