dcf model
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Transcript of dcf model
NOSHOW
DCF Analysis Input Sheet -4/8/2023Property Assumptions
1 Name Drug Store Tenant
2 Location Main and Main
3 Type of Property Retail
4 Purpose of Analysis Risk Analysis
5 Prepared By Scottsdale Analysts
6 Size (Square feet or Number of Units) 15,000
7 Assessed/Appraised Value of Land $3,200,000
8 Assessed/Appraised Value of Improvements $1,800,000
9 Assessed/Appraised Value of Personal Property
10 Useful Life of Improvements (Years) 39.0
11 Useful Life of Personal Property (Years)
12 Acquisition Price $1,000,000
13 Acquisition Costs
14 Potential Rental Income and Escalations Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
15 Potential Rental Income 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
16 Other Income (Collectable)
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
17 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
18 Operating Expenses and Escalations Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
19 Total Operating Expenses
Financing Assumptions 1st Mortgage 2nd Mortgage
20 Loan Amount
21 Interest Rate 7.50%
22 Amortization Period (Years) 20
23 Loan Term (Years) 20
24 Payments Per Year 12 12
25 Loan Costs
Investor/Owner Assumptions26 Ordinary Income Marginal Tax Rate 35.00%
27 Capital Gains Tax Rate 15.00%
28 Cost Recovery Recapture Tax Rate 25.00%
29 Total Capital to Invest $5,000,000
30 After Tax Reinvestment Rates $0 To 5.00%
31 $0 To 5.00%
$0 And above 5.00%
31 Anticipated Holding Period (1 - 10 Years) 10
32 Disposition Price 7.50%
33 Disposition Cost of Sale 3.50%
Annual Vacancy Rates (Percent of Potential Rental Income)
Instructions :
Clear & Reset
Input Cells Formula Cells Description Cells
Legend
Cash Flow Analysis Worksheet-Without FinancingProperty Name Drug Store Tenant Acquisition Price $1,000,000
Location Main and Main Plus Acquisition Costs $0
Type of Property Retail Plus Loan Costs $0
Size of Property (sf/units) 15,000 Minus Mortgages $0
Purpose of Analysis Risk Analysis Equals Initial Investment $1,000,000
Prepared by Scottsdale Analysts
Date Prepared April 8, 2023
MORTGAGE DATA COST RECOVERY DATA BASIS DATA1st Mortgage 2nd Mortgage Improvements Personal Property
Amount Value $1,800,000 $0 Acquisition Price $1,000,000
Interest Rate C. R. Method SL SL Acquisition Costs $0
Amortization Period Useful Life 39.0 0 Total Acquisition Basis $1,000,000
Loan Term In Service Date 1-Jan 1-Jan
Payments/Year Date of Sale 31-Dec 31-Dec
Periodic Payment 12 Months % age 2.564% 0.000%
Annual Debt Service 11.5 Months % age 2.457% 0.000%
Loan Fees/Costs
TAXABLE INCOME
End of Year 1 2 3 4 5 6 7 8 9 10 11
1 POTENTIAL RENTAL INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
2 -Vacancy & Credit Losses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
3 EFFECTIVE RENTAL INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
4 +Other Income (collectable) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
5 GROSS OPERATING INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6 TOTAL OPERATING EXPENSES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7 NET OPERATING INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
8 -Interest-First Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
9 -Interest-Second Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
10 -Cost Recovery-Improvements $44,226 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $44,226
11 -Cost Recovery-Personal Property $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
12 -Loan Costs Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
13 -
14 -
15 REAL ESTATE TAXABLE INCOME ($44,226) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($44,226)
16 Tax Liability (Savings) at 35% ($15,479) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($15,479)
CASH FLOW17 NET OPERATING INCOME (LINE 8) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
18 -Annual Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
19 -
20 -
21 -
22 CASH FLOW BEFORE TAXES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
23 -Tax Liability (Savings) (Line 17 ) ($15,479) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($15,479)
24 CASH FLOW AFTER TAXES $15,479 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $15,479
Note: Do not enter any information on this sheet. All values are derived from Input Sheet.
Cash Sale Worksheet-Without FinancingMORTGAGE BALANCES
End of Year: 1 2 3 4 5 6 7 8 9 10
Principal Balance - 1st Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Balance - 2nd Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL UNPAID BALANCE $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
CALCULATION OF SALE PROCEEDSEND OF YEAR 1 2 3 4 5 6 7 8 9 10
PROJECTED SALES PRICE (Rounded to nearest 000) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
CALCULATION OF ADJUSTED BASISBasis at Acquisition $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,000,000
+Capital Additions $0
-Cost Recovery (Depreciation) Taken $0 $0 $0 $0 $0 $0 $0 $0 $0 $457,668
-Basis in Partial Sales $0
=Adjusted Basis at Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332
CALCULATION OF CAPITAL GAIN ON SALESale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Costs of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Adjusted Basis at Sale (Line 5) $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332
-
=Gain or (Loss) $0 $0 $0 $0 $0 $0 $0 $0 $0 ($542,332)
-Straight Line Cost Recovery (limited to gain) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Suspended Losses $0
=Capital Gain from Appreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
ITEMS TAXED AS ORDINARY INCOMEUnamortized Loan Fees/Costs (negative) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
+
=Ordinary Taxable Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
CALCULATION OF SALE PROCEEDSSale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cost of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Participaiton Payments on Sale $0
-Mortgage Balance(s) $0 $0 $0 $0 $0 $0 $0 $0 $0
+Balance of Funded Reserves $0
=SALE PROCEEDS BEFORE TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax (Savings)on Ordinary Income (Line 22 x 35%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax on Cost Recovery Recapture (Line 17 x 25%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax on Capital Gain (Line 19 x 15%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
=SALE PROCEEDS AFTER TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Note: Do not enter any information on this sheet. All values are derived from other sheets.
NPV And IRR-Without Financing
Before Tax After TaxEOY $ EOY $
0 ($1,000,000) 0 ($1,000,000)
1 $0 $0 1 $15,479 $0
2 $0 $0 2 $16,153 $0
3 $0 $0 3 $16,153 $0
4 $0 $0 4 $16,153 $0
5 $0 $0 5 $16,153 $0
6 $0 $0 6 $16,153 $0
7 $0 $0 7 $16,153 $0
8 $0 $0 8 $16,153 $0
9 $0 $0 9 $16,153 $0
10 $0 + $0 10 $15,479 + $0
IRR = Err:523 IRR = Err:523
NPV @ Err:523 = Err:523 NPV @ Err:523 = Err:5230 0
O ($1,000,000) O ($1,000,000)1 $0 1 $15,479 2 $0 2 $16,153 3 $0 3 $16,153 4 $0 4 $16,153 5 $0 5 $16,153 6 $0 6 $16,153 7 $0 7 $16,153 8 $0 8 $16,153 9 $0 9 $16,153
10 $0 10 $15,479
Input Cells Formula Cells Description Cells
Legend
Cash Flow Analysis Worksheet-With FinancingProperty Name Drug Store Tenant Acquisition Price $1,000,000
Location Main and Main Plus Acquisition Costs $0
Type of Property Retail Plus Loan Costs $0
Size of Property (sf/units) 15,000 Minus Mortgages $0
Purpose of Analysis Risk Analysis Equals Initial Investment $1,000,000
Prepared by Scottsdale Analysts
Date Prepared April 8, 2023
MORTGAGE DATA COST RECOVERY DATA BASIS DATA1st Mortgage 2nd Mortgage Improvements Personal Property
Amount $0 $0 Value $1,800,000 $0 Acquisition Price $1,000,000
Interest Rate 7.50% 0.00% C. R. Method SL SL Acquisition Costs $0
Amortization Period 20 0 Useful Life 39.0 0 Total Acquisition Basis $1,000,000
Loan Term 20 0 In Service Date 1-Jan 1-Jan
Payments/Year 12 12 Date of Sale 31-Dec 31-Dec
Periodic Payment $0.00 $0.00 12 Months % age 2.564% 0.000%
Annual Debt Service $0 $0 11.5 Months % age 2.457% 0.000%
Loan Fees/Costs $0 $0
TAXABLE INCOME
End of Year 1 2 3 4 5 6 7 8 9 10 11
1 POTENTIAL RENTAL INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
2 -Vacancy & Credit Losses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
3 EFFECTIVE RENTAL INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
4 +Other Income (collectable) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
5 GROSS OPERATING INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
6 TOTAL OPERATING EXPENSES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
7 NET OPERATING INCOME $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
8 -Interest-First Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
9 -Interest-Second Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
10 -Cost Recovery-Improvements $44,226 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $46,152 $44,226
11 -Cost Recovery-Personal Property $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
12 -Loan Costs Amortization $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
13 -
14 -
15 REAL ESTATE TAXABLE INCOME ($44,226) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($46,152) ($44,226)
16 Tax Liability (Savings) at 35% ($15,479) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($15,479)
CASH FLOW17 NET OPERATING INCOME (LINE 8) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
18 -Annual Debt Service $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
19 -
20 -
21 -
22 CASH FLOW BEFORE TAXES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
23 -Tax Liability (Savings) (Line 17 ) ($15,479) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($16,153) ($15,479)
24 CASH FLOW AFTER TAXES $15,479 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $15,479
Note: Do not enter any information on this sheet. All values are derived from other sheets.
Cash Sale Worksheet-With FinancingMORTGAGE BALANCES
End of Year: 1 2 3 4 5 6 7 8 9 10
Principal Balance - 1st Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Balance - 2nd Mortgage $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL UNPAID BALANCE $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
CALCULATION OF SALE PROCEEDSEND OF YEAR 1 2 3 4 5 6 7 8 9 10
PROJECTED SALES PRICE (Rounded to nearest 000) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
CALCULATION OF ADJUSTED BASISBasis at Acquisition $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,000,000
+Capital Additions $0
-Cost Recovery (Depreciation) Taken $0 $0 $0 $0 $0 $0 $0 $0 $0 $457,668
-Basis in Partial Sales $0
=Adjusted Basis at Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332
CALCULATION OF CAPITAL GAIN ON SALESale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Costs of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Adjusted Basis at Sale (Line 5) $0 $0 $0 $0 $0 $0 $0 $0 $0 $542,332
-
=Gain or (Loss) $0 $0 $0 $0 $0 $0 $0 $0 $0 ($542,332)
-Straight Line Cost Recovery (limited to gain) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Suspended Losses $0
=Capital Gain from Appreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
ITEMS TAXED AS ORDINARY INCOMEUnamortized Loan Fees/Costs (negative) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
+
=Ordinary Taxable Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
CALCULATION OF SALE PROCEEDSSale Price $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cost of Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Participaiton Payments on Sale $0
-Mortgage Balance(s) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
+Balance of Funded Reserves $0
=SALE PROCEEDS BEFORE TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax (Savings)on Ordinary Income (Line 22 x 35%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax on Cost Recovery Recapture (Line 17 x 25%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
-Tax on Capital Gain (Line 19 x 15%) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
=SALE PROCEEDS AFTER TAX $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Note: Do not enter any information on this sheet. All values are derived from other sheets.
NPV And IRR-With Financing
Before Tax After TaxEOY $ EOY $
0 ($1,000,000) 0 ($1,000,000)
1 $0 $0 1 $15,479 $0
2 $0 $0 2 $16,153 $0
3 $0 $0 3 $16,153 $0
4 $0 $0 4 $16,153 $0
5 $0 $0 5 $16,153 $0
6 $0 $0 6 $16,153 $0
7 $0 $0 7 $16,153 $0
8 $0 $0 8 $16,153 $0
9 $0 $0 9 $16,153 $0
10 $0 + $0 10 $15,479 + $0
IRR = Err:523 IRR = Err:523
NPV @ Err:523 = Err:523 NPV @ Err:523 = Err:5230 0
O ($1,000,000) O ($1,000,000)1 $0 1 $15,479 2 $0 2 $16,153 3 $0 3 $16,153 4 $0 4 $16,153 5 $0 5 $16,153 6 $0 6 $16,153 7 $0 7 $16,153 8 $0 8 $16,153 9 $0 9 $16,153
10 $0 10 $15,479
Input Cells Formula Cells Description Cells
Legend
Cost of Funds And Leverage ImpactBefore and After Tax Cost of Funds
Loan Information Non-discounted LoanLoan Amount $0 EOP $Interest Rate 7.50% 0 $0 Amortization Period 20 1 $0.00 Payments Per Year 12 Discount Points $0 Projected Holding Period 10 120 $0.00 +
Before Tax Cost =
Before Tax Cost of Funds x (1-Tax Rate) = After Tax Cost of Funds120.00%
Relationship Between Cost of Funds and Prorperty Yield
Cost of Funds
Before Tax 120.00% After Tax 78.00%
Effective Tax Rate and Yield Change
Before Tax Yield Err:523
After Tax Yield Err:523
Effective Tax Rate 35%
Mortgage Portfolio
Note: Do not enter any information on this sheet. All values are derived from other sheets.
Cost of Funds And Leverage ImpactBefore and After Tax Cost of Funds
Non-discounted Loan Discounted LoanEOP $
0 $0 1 $0.00
$0 120 $0.00 + $0
120.00% Before Tax Cost = 120.00%
Before Tax Cost of Funds x (1-Tax Rate) = After Tax Cost of Fundsx 65.00% = 78.00%
Relationship Between Cost of Funds and Prorperty Yield
Property Yield
Err:523 Err:523Err:523 Err:523
Effective Tax Rate and Yield Change
Err:523 Err:523 Err:523
Err:523 Err:523 Err:523
Err:523 Err:523
Real Estate Without Financing
Real Estate With
Financing
Note: Do not enter any information on this sheet. All values are derived from other sheets.
Capital Accumulation Without FinancingTotal Capital to Invest = $5,000,000
EOY $0 ($1,000,000)
1 $15,479 $0 5.00%
2 $16,153 + $16,253 = $32,406 5.00%
3 $16,153 $0 + $34,027 =
4 $16,153 $0 +
5 $16,153 $0
6 $16,153 $0
7 $16,153 $0
8 $16,153 $0
9 $16,153 $0
10 $15,479 + $0
IRR = Err:523
$5,000,000
Annual After Tax Compound Growth Rate of Capital
Total Capital Invested
Note: Do not enter any information on this sheet. All values are derived from other sheets.
($1,000,000)$15,479 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $15,479
Capital Accumulation Without Financing
($4,000,000) 5.00%
$50,180 5.00%
$52,689 = $68,842 5.00%
+ $72,284 = $88,437 5.00%
+ $92,859 = $109,012 5.00%
+ $114,463 = $130,616 5.00%
+ $137,147 =
+
Capital Accumulation =
10 Years $6,717,032
Annual After Tax Compound Growth Rate of Capital 3.00%
Capital Accumulation
Note: Do not enter any information on this sheet. All values are derived from other sheets.
$6,515,579
$0
$0
$0
$0
$0
$0
$0
$153,300 $05.00%
$160,965 = $177,118 $0 5.00%
+ $185,974 = $201,453
Capital Accumulation = $6,717,032
Capital Accumulation With FinancingTotal Capital to Invest = $5,000,000
EOY $0 ($1,000,000) ($4,000,000)
1 $15,479 $0 5.00%
2 $16,153 + $16,253 = $32,406 5.00%
3 $16,153 $0 + $34,027 = $50,180 5.00%
4 $16,153 $0 + $52,689
5 $16,153 $0
6 $16,153 $0
7 $16,153 $0
8 $16,153 $0
9 $16,153 $0
10 $15,479 + $0
IRR = Err:523
$5,000,000
Annual After Tax Compound Growth Rate of Capital
Total Capital Invested
Note: Do not enter any information on this sheet. All values are derived from other sheets.
($1,000,000)$15,479 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $16,153 $15,479
Capital Accumulation With Financing
5.00%
= $68,842 5.00%
+ $72,284 = $88,437 5.00%
+ $92,859 = $109,012 5.00%
+ $114,463 = $130,616 5.00%
+ $137,147 = $153,300 5.00%
+ $160,965 =
+
Capital Accumulation =
10 Years $6,717,032
Annual After Tax Compound Growth Rate of Capital 3.00%
Capital Accumulation
Note: Do not enter any information on this sheet. All values are derived from other sheets.
$6,515,579
$0
$0
$0
$0
$0
$0
$0
$0
$177,118 $0 5.00%
$185,974 = $201,453
Capital Accumulation = $6,717,032
SummaryMeasures of Investment Performance
Before Tax IRR Err:523After Tax IRR Err:523After Tax Capital Accumulation $6,717,032 After Tax Annual Growth Rate of Capital 3.00%
Without Financing
Note: Do not enter any information on this sheet. All values are derived from other sheets.
SummaryMeasures of Investment Performance
Err:523Err:523
$6,717,032 3.00%
With Financing
Note: Do not enter any information on this sheet. All values are derived from other sheets.