Investment Property IRR Analysis

6.71% IRR. Thin Margin. Review Annually.

4-property SFR portfolio, 10-year hold, and Mortgage Management & Analysis Program™.

Robert Boladian, CMPS® CLA® · Mission Pacific Mortgage · For advisor use · Confidential

Client Situation

A private HNW California real estate investor, referred by his financial advisor, acquired a 4-property SFR portfolio for $2,673,000 at 49.5% LTV with a 6.375% fixed 30-year loan. The acquisition is a completed transaction. The ten-year IRR figures are projections.

6.71%Projected Annual IRRTVM method, 10-year lifecycle

$680/moNet Cash FlowRent minus PITI and expenses

$2.58MProjected Sale ProceedsYear 10 at a 4% appreciation assumption

How It Worked

The Problem

The investor had never completed a full IRR analysis on the portfolio.
No annual review framework had been established with the FA.

The Structure

A full 10-year TVM model used $1,382,060 invested, $680 per month net cash flow, and $2,581,345 projected terminal value.
Assumptions included 4% annual appreciation and 6.5% sales costs.

The Modeled Result

Projected annual IRR is 6.71%, only 34 basis points above the 6.375% mortgage rate.
A 50 basis point degradation in an input could flip the position to negative leverage.
Recommendation: formal annual review to reconsider hold, refinance, or sell.

What This Means for the Advisor

→ Every FA client with investment real estate should have a periodic IRR review.

→ The analysis can open refinance, 1031 exchange, or portfolio expansion conversations, all of which can affect AUM.

“At a 6.375% mortgage rate and a 6.71% projected IRR, leverage is working, but the margin is narrow. This is exactly the conversation an advisor should be having with real estate-owning clients.”

Robert Boladian, CMPS® CLA® · Mission Pacific Mortgage

Have a client with investment properties? When was the last IRR review?

Request a custom analysis to support the next hold, refinance, or sell conversation.

BOOK A PARTNER CALL

Outcomes anonymized. Results may vary. The acquisition described is a completed transaction. IRR, cash flow, and terminal value are ten-year projections based on stated assumptions of 4% annual appreciation and 6.5% sales costs. They are not guarantees. Actual results will differ with rents, vacancy, expenses, tax treatment, and market conditions. The 6.375% rate shown is the rate in place on the analyzed portfolio and is not a current rate quote or offer of credit. Not tax or investment advice.

Robert Boladian, CMPS®, CLA® · NMLS #14241 · (760) 828-7444 · [email protected]
Mission Pacific Mortgage · EAB Holdings, Inc. NMLS #1786785 · DFPI Licensed · San Diego, CA