STR Investment Analyzer

Property Analysis

1234 E Live AZ Co Dr

Mesa, AZ 85215

5 Bed · 3 Bath2,717 SqFtHeated PoolHot TubGame RoomArcade30.8% Rev/Price

✅ STR PermittedTOT: 2.5%

$475K

Offer Price

$146K

Projected Revenue

19.5%

Cash-on-Cash

Deal Structure

Select Strategy

Property & Acquisition Details

Inputs

Street Address

City

State

Zip

Beds

Baths

Pool

Living SqFt

Lot SqFt

Year Built

MLS Number

Property Summary

5 Bed / 3 Bath / 2,717 SqFt / Heated Pool

Purchase / Offer Price

After Repair Value (ARV)

Investor Tax Profile

Filing Status

Adjusted Gross Income

Before STR deductions

Marginal Rate

24%

Effective Rate

17.8%

Federal Tax

$62,134

This is for estimation purposes only and does not constitute tax advice. Consult your tax professional for personalized guidance. Need a great CPA who specializes in STR taxes? Reach out and I'll connect you with mine.

BRRRR Deal Structure

Construction / Rehab Budget

Furnishing $/SqFt

2,717 sqft = $87,487 total

Est. Closing Costs

Bridge Loan Amount

Bridge Down Payment

Holding Costs (Pre-Revenue)

Refi LTV

Refi Rate (DSCR)

Refi Loan Term

→

Purchase

Bridge loan

→

Rehab

$97K construction

→

Refi

Month 4 · Cash-out

→

Furnish

Design & launch

Revenue

Month 6 · STR live

Revenue Assumptions

STR

Projected Gross Revenue (Annual)

Annual Revenue Growth

Property Appreciation

Occupancy Assumptions

Est. Occupancy

Available Nights

Avg Length of Stay

Annual Operating Expenses

Cleaning & Turnover

Electric

Pool Service

Water / Sewer

Landscaping / Yard

Mgmt Fee (~6% rev)

Insurance

Property Tax

Supplies & Consumables

CapEx Reserve (% of Revenue)

Investment Summary

Year 1 Tax Savings

$62,134

Cost Seg + Depreciation

Effective Cash in Deal

$137,866

After tax recapture

Cash-on-Cash Return

19.5%

On $200K invested

Equity Created

$225K

$200K → $425K

5-Year Total Return

246.1%

Cash + Equity + Tax

Gross Revenue

$146,207

Year 1 projected

Net Operating Income

$81,025

55.4% margin · 17.1% cap rate

Annual Debt Service

$41,990

$3,499/mo

Net Cash Flow

$39,035

$3,253/mo

Est. Annual Occupancy

65.0%

228 nights booked

Avg Daily Rate

$643

4.5 bookings/mo

Revenue per Available Night

$418

RevPAR

Revenue-to-Price Ratio

30.8%

Bianchi Method: 20%+ strong

Deal Structure & Capital Stack

BRRRR

Sources & Uses

Capital

Item	Amount
Purchase Price	$475,000
Bridge Loan (incl. $97K construction)	$524,500
Down Payment (10%)	$47,500
Est. Closing Costs	$28,000
Holding Costs (pre-revenue)	$37,000
Design / Furnish / Launch	$87,500
Total Investor Capital	$200,000

Cash-Out Refinance

Month 4

Item	Amount
Appraised Value (ARV)	$700,000
New Loan (80% LTV)	$560,000
Pay Off Bridge Loan	($524,500)
Cash Back to Investor	$35,500
Capital Still in Deal	$164,500

DSCR

1.93x

Cap Rate

17.1%

CoC Return

19.5%

Operating Performance

Annual P&L (Stabilized)

Year 1

Revenue

$146K

$146,207

Expenses

$65K

$65,182

Debt Svc

$42K

$41,990

Cash Flow

$39K

$39,035

Category	Annual	Monthly
Gross Revenue	$146,207	$12,184
Cleaning & Turnover	($16,839)	($1,403)
Electric	($9,649)	($804)
Pool Service	($7,133)	($594)
Water / Sewer	($4,072)	($339)
Landscaping	($1,698)	($142)
Management (~6%)	($8,787)	($732)
Insurance	($4,200)	($350)
Property Tax (0.70% eff. rate)	($3,325)	($277)
Supplies & Consumables	($2,169)	($181)
Other Operating	($0)	($0)
CapEx / Replacement Reserve (5.0%)ⓘ	($7,310)	($609)
Net Operating Income	$81,025	$6,752
Debt Service	($41,990)	($3,499)
Net Cash Flow	$39,035	$3,253

Monthly Revenue Seasonality

AZ Market

$13K

Jan

$14K

Feb

$24K

Mar

$16K

Apr

$13K

May

$8K

Jun

$6K

Jul

$7K

Aug

$8K

Sep

$6K

Oct

$15K

Nov

$16K

Dec

Arizona STR seasonality: Q1 & Q4 strongest · Summer trough Jun–Sep

Break-Even Analysis

Break-Even Occupancy

47.6%

Min occupancy to cover all costs + debt

Break-Even Revenue

$107,172

Annual revenue needed to break even

Safety Cushion

26.7%

Revenue exceeds break-even by this margin

Property Management Scenarios

Returns by Management Strategy

Scenarios

Scenario	PM Cost	Net Cash Flow	CoC	DSCR
Self-Managed (~6%)	$8,772	$39,049	19.5%	1.93x
10% Property Mgmt	$14,621	$33,201	16.6%	1.79x
20% Property Mgmt	$29,241	$18,580	9.3%	1.44x

Self-Managed

19.5%

$39,049/yr

10% PM

16.6%

$33,201/yr

20% PM

9.3%

$18,580/yr

Portfolio Comp Data

2025 Actuals

Property	Purchased	Revenue	Mortgage	Net Income	CoC
Medina (5BR)	$760K	$158,060	$64,394	$35,998	12.3%
Mesa Vista (5BR)	$760K	$134,354	$58,066	$18,212	4.8%
5BR Average	$760K	$146,207	$61,230	$27,105	8.6%
1234 E Live AZ Co Dr	$475K	$146K	$42K	$39K	19.5%

The BRRRR Advantage

$200K cash + $97K construction from bridge. Refi month 4 returns cash; STR live month 6. $39K/yr stabilized cash flow. $225K forced equity created.

Market Comparable Data

AirDNA Market Comps

Third-Party

Property	Revenue	Occupancy	ADR	RevPAR	Beds	Distance
5BR/3BA — E Brown Rd, Mesa	$138,000	62%	$610	$378	5	1.2 mi
5BR/3BA — N Val Vista Dr, Mesa	$125,000	58%	$590	$342	5	2.8 mi
5BR/4BA — E University Dr, Mesa	$152,000	68%	$612	$416	5	3.1 mi
Market Average	$138,333	63%	$604	$379	5	—
1234 E Live AZ Co Dr	$146,207	65%	$643	$418	5	—

Subject property projects 5.7% above market average revenue for comparable 5BR STRs within 3.1 miles.

Source: AirDNA

STR Tax Loophole & Cost Segregation

Tax Strategy

Cost Segregation Breakdown

Bonus Depreciation

With material participation (100+ hours/year) and a cost segregation study, bonus depreciation accelerates deductions against W-2 or active income in Year 1.

15%

25%

12%

40%

Land (15%)

Personal Property (5-yr)

7-Year Property

15-Year Property

Residential (27.5-yr)

Component	% of Basis	Yr 1 Deduction
Personal Property (5-yr)	25%	$121,550
7-Year Property	8%	$38,896
15-Year Property	12%	$58,344
Residential (27.5-yr)	40%	$7,072
Mortgage Interest	—	$35,599
Operating Expenses	—	$65,182
Total Yr 1 Deductions		$326,643
Tax Savings @ 24% marginal		$62,134

Tax Savings Impact

Year 1

Total Capital Invested

$200,000

Year 1 Tax Savings

-$62,134

Effective Cash in Deal After Tax Benefit

$137,866

31.1% of your capital returned via tax savings

How Your STR Deductions Save Taxes

10%

12%

22%

24%

Your AGI (before STR)	$350,000
Filing Status	Married Filing Jointly
Marginal Tax Bracket	24%
Federal Tax (without STR)	$62,134
Total STR Year 1 Deductions	($326,643)
Adjusted AGI (after STR)	$23,357
Federal Tax (with STR)	$0
Year 1 Federal Tax Savings	$62,134
Effective Savings Rate on Deductions	19.0%

Your STR deductions push you from the 24% bracket down to the 10% bracket.

Important: At an AGI of $350,000 (Married Filing Jointly), your STR deductions save taxes at a blended rate of 19.0% — not the 37% maximum rate. The 37% bracket only applies to married joint filers with taxable income above $751,600.

The STR Tax Loophole

Short-term rentals with an average guest stay under 7 days are not considered rental activity by the IRS. If you materially participate (100+ hrs and more than anyone else), losses become non-passive and can offset W-2, business, and investment income — regardless of your income level. No $150K AGI limitation applies.

100% Bonus Depreciation — Permanently Restored

The One Big Beautiful Bill Act (signed July 4, 2025) permanently restored 100% bonus depreciation for all qualifying 5, 7, and 15-year property acquired after January 19, 2025. All eligible short-life assets are fully deductible in Year 1. No phase-out. No sunset. Consult your CPA for your specific situation.

Tax calculations are estimates based on 2025/2026 federal brackets. Does not include state taxes, AMT, NIIT (3.8%), or phase-outs. This is not tax advice — consult your tax professional. Need a great CPA who specializes in STR taxes? Reach out and I'll connect you with mine.

5-Year Wealth Projection

Cumulative Returns Timeline

Projection

5-Year Cash Flow

$220,221

5-Year Tax Savings

$169,030

5-Year Total Wealth Created

$492,161

Year	Revenue	NOI	Cash Flow	Interest	Principal	Balance	Tax Benefit	Prop. Value	Equity	Total Return
Year 1	$146,207	$81,025	$39,035	$35,599	$6,391	$553,609	$62,134	$494,000	$-59,609	60.1%
Year 2	$150,593	$83,455	$41,465	$35,178	$6,812	$546,797	$26,200	$513,760	$-33,037	103.8%
Year 3	$155,111	$85,959	$43,969	$34,730	$7,260	$539,538	$26,545	$534,310	$-5,227	149.3%
Year 4	$159,764	$88,538	$46,548	$34,252	$7,738	$531,800	$26,896	$555,683	$23,883	196.7%
Year 5	$164,557	$91,194	$49,204	$33,743	$8,247	$523,553	$27,254	$577,910	$54,357	246.1%

Year 1 mortgage interest ($35,599) is fully deductible as an operating expense for STR properties.

Sensitivity Analysis — What If Scenarios

Stress Test Comparison

Scenarios

Metric	Bear Case -20% Revenue, +1% Rate, 2% Appreciation	Base Case As Modeled	Bull Case +15% Revenue, -0.5% Rate, 6% Appreciation	Custom +0% Revenue, +0% Rate, 4% Appreciation
Revenue	$116,966	$146,207	$168,138	$146,207
NOI	$64,820	$81,025	$93,178	$81,025
Cash Flow	$18,338	$39,035	$53,363	$39,035
CoC Return	9.2%	19.5%	26.7%	19.5%
DSCR	1.39x	1.93x	2.34x	1.93x
5-Yr Property Value	$524,438	$577,910	$635,657	$577,910
5-Yr Cumulative CF	$111,726	$220,221	$295,618	$220,221

Custom Scenario Inputs

Revenue+0%

Interest Rate+0%

Appreciation4.0%

Even in the bear case (20% revenue decline + 1% rate increase), this property maintains positive cash flow with a DSCR of 1.39x.

Exit Strategy & Disposition Analysis

Year 5 Exit Analysis

Disposition

Projected Exit Value

$577,910

Lower of appreciation vs cap rate

After-Tax Proceeds

$-47,927

Net of all selling costs & taxes

Full-Cycle IRR

24.9%

70.7% total ROI

Item	Amount
Projected Sale Price	$577,910
Less: Selling Costs (6.5%)	($37,564)
Less: Remaining Loan Balance	($523,553)
Gross Proceeds	$81,512
Less: Depreciation Recapture Tax (25%)	($63,538)
Less: Capital Gains Tax (20%)	($1,182)
After-Tax Sale Proceeds	$-47,927
Plus: Cumulative Cash Flow (Years 1-5)	$220,221
Plus: Cumulative Tax Savings (Years 1-5)	$169,030
Total Full-Cycle Return	$141,324

Full-Cycle ROI

70.7%

Internal Rate of Return

24.9%

Exit via 1031 exchange would defer all capital gains and depreciation recapture taxes.

Primary Home vs. STR Investment

Your Home Equity vs. Deploying Capital into an STR

Comparison

See how your current home equity compares to the wealth-building potential of an STR investment.

Home Current Value

Remaining Mortgage

Primary Residence

Current Value$625,000

Mortgage Balance$420,000

Current Equity$205,000

5-Yr Value (3.5%)$742,304

5-Yr Equity Gain$117,304

Tax BenefitsMortgage Interest Only

Annual Cash Flow$0 (cost center)

STR Investment

Purchase Price$475,000

ARV / Market Value$700,000

Instant Equity$225,000

5-Yr Value (4%)$577,910

5-Yr Equity Gain$102,910

Tax BenefitsCost Seg + Depreciation

Annual Cash FlowGenerates $146K revenue