Discounted Cash Flows

Discounted Cash Flows:
Year	0	1	2	3	4	5	6	7	8	9	10	11
Purchase Price	(197,900)
Potential Gross Income (PGI)		25,440	26,203	26,989	27,799	28,633	29,492	30,377	31,288	32,227	33,193	34,189
Other Income (OI or PGMI)		0	0	0	0	0	0	0	0	0	0	0
(Vacancy & Collection Loss) (VCL)		(2,162)	(2,227)	(2,294)	(2,363)	(2,434)	(2,507)	(2,582)	(2,659)	(2,739)	(2,821)	(2,906)
Effective Gross Income (EGI)		23,278	23,976	24,695	25,436	26,199	26,985	27,795	28,629	29,487	30,372	31,283
Operating Expenses (OE)		(6,390)	(6,518)	(6,648)	(6,781)	(6,917)	(7,055)	(7,196)	(7,340)	(7,487)	(7,637)	(7,789)
Net Operating Income (NOI)		16,888	17,458	18,047	18,655	19,282	19,930	20,598	21,288	22,000	22,735	23,494
(Debt Service) (DS)		(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)
Before Tax Cash Flow	(118,740)	10,498	11,068	11,657	12,265	12,892	13,540	14,208	14,898	15,610	16,345	17,104
Sales Price	276,397
Loan Balloon Payment	(35,437)
Before Tax Sales Revenue	240,960
	Unleveraged Cash Flow			Leveraged Cash Flow			General Assumptions
Cap Rate : 8.5%	Time	$		Time	$		Rental Growth Rate	1.03
Interest Rate : 2.625%: 15-Year Fixed	0	(197,900)		0	(118,740)		Expense Growth Rate	1.02
	1	16,888		1	10,498		VCL (8.5%)	0.085
	2	17,458		2	11,068		Expense Ratio
	3	18,047		3	11,657		Terminal Capitalization Rate	0.085
	4	18,655		4	12,265
	5	19,282		5	12,892
	6	19,930		6	13,540		Loan Assumptions	Monthly
	7	20,598		7	14,208		Loan to Value (40%)	70,160
	8	21,288		8	14,898		Interest Rate	2.63%
	9	22,000		9	15,610		Amortization Period	15 year
	10	22,735		10	257,306		Payments per year	12
	Sales Price:	276,397					Payment	532.50 a month
	NPV:	$ 185,405.48		NPV:	$ 181,652.09		Balloon Payment	$  35,437.00
	IRR:	0.1192		IRR:	0.1551

 

 

 

 

 

 Property Analysis:

 

River Oaks Townhome Unit 1304

 

Property Address: 305 Holleman Drive Unit 1304 College Station, TX 77840

 

Square Footage: 1836

 

Asking Price: $197,900.00

 

Price/Square Ft: 95.59

 

HOA Fee: 120.00/month

 

 

General Construction:

-True townhome style living with 9' ceiling and fenced rear yard

-Large bedrooms with ceiling fan and overhead lights

-Walk-in closets in each bedroom

-Each bedroom has its own bathroom

-Individual thermostats in each bedroom

-Walk-in utility room with available full-size washer and dryer

- Fully equipped kitchen with self-cleaning oven and glass stovetop; large refridgerator with ice maker; microwave oven; dishwasher; granite countertops

-Faux wood blinds on each window

-Assigned resident and visitor parking

-Wired for security, internet, and surround sound

-Electronic remote gate entry for each resident

 

 

 

 

Floor Plan:

 

 

 

Low Maintenance Exterior:

-Lawn care provided by Home Owners Association

-ACME brick

-Concrete rear patio

-Fenced private backyard

-Front yard landscaping

-Sidewalks for easy access to other residents and parking

 

Amenities:

-On Texas A&M shuttle route

-Secure gated entrances with parking at resident's door

-Clubhouse with coffee bar, fitness room, pool, hot tubs, and jogging trails

-Located adjacent to Wolf Pen Creek Park

 

Convenient Location:

-About one mile from campus

-On campus bus route

-Less than five minutes from Sorority Row and Post Oak Mall

-Gated entry with wrought iron fencing

-Located within walking distance from Wolf Pen Creek

 

 

Competitor Analysis:

Competitors include 4 bed 4 bath townhomes within a 5 mile radius of Texas A&M University that were built within 5 years prior or post 2006. Other available River Oaks Townhomes for sale are also considered competitors.

Competitor	Year Built	Sq Ft	Rent Revenue	Current Sale Price
Wolf Creek Condos	2008	1473	$1,590.00	For lease only
Waterwood Townhomes	2006	1490	$1450.00	$144,500.00
Fox Run Condos	2003	1600	$1,590.00	$142,000.00
River Oaks Townhomes	2009	1693	$1695.00	$197,900.00

 

Supply & Demand:

Students of Texas A&M University occupy a large portion of the local rental stock. Approximately, 8,000 students are housed in dormitories and 700 students are living in university owned apartments located, however this is going to change due to redevelopment of on campus housing. The remaining 37,000 students are housed in the private housing market. The estimated vacancy rate of 8.5 percent (Figure 8), has increased by 2 percentage points during the 12 year period. On average, 750 multifamily units a year have been permitted in the HMA since 2000.

Our target market is Texas A&M students. With the property conveniently placed just one mile from campus and on the bus route, it is an ideal location for student living. The Texas Higher education board reported fall 2011 enrollment for Texas A&M at 49,861, and showed a steady increase over the past 4 years. Demand for student living is on the rise.

 

SWOT Analysis:

 

Map of  River Oaks and Surronding Area