Sunday, March 4, 2012

PUD Real Time Investment Numbers

The MPIRES group just ran an analysis on a PUD in the hot Santana Row rental area for an investor client.  Here are the numbers, what do you think?

Purchase price $475,000 (short sale)
3 bedrooms, 2.5 baths, 1500 square feet, 2 car attached garage, $115 HOA dues.
The home is 8 year old and looks great.
Rent comp in complex achieved in November - same model - $2700 per month!
 4% financing
$196,000 down payment
2.6% cash on cash return year 1
8.67% IRR per year average before tax on a 10 year hold.
6.96% IRR after tax on a 10 year hold.

Great, solid asset in a hot rental area.  Our projection of sales price in year 10 is based on a same Cap Rate as the purchase price Cap Rate. We feel the market will have a lower Cap Rate in 10 years which will dramatically increase the rate of return.

We know other great short sales, REOs and well-priced equity sales throughout Silicon Valley for investors - call us today!

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