I have a similar assignment due soon. Any help is appreciated as I am fairly confused. I am more looking for info on how to work these problems.

Purchase Price 4,000,000

Units 75

Market Rent $800

Annual Adjustment $25

Current Occupancy 60%

Annual Adjustment 5%

Stabilized Occupancy 90%

Operating Expenses 30%

Capital Expenditures $250.00

Holding Period (years) 10

Going Out Cap Rate 9%

Selling Expenses 6%

Unlevered Discount Rate 13%

LTV 70%

Loan Rate 7%

Amortization (years) 30

Finance Costs 4%

Levered Discount Rate 16%

a. Calculate potential gross income for each year starting with the base year rent and escalations

given.

b. Calculate vacancy using the current occupancy and absorption projections given. Note that

the vacancy percentage is 100% minus the occupancy percentage.

c. Calculate the fixed annual capital expenditures (does not change each year).

d. Construct a standard pro forma grid with the appropriate line items.

and calculate net operating income (NOI) for each year of the holding period.

e. Calculate the net sale proceeds from the sale of the property showing each step in a grid.

Sales price is determined by using the appropriate NOI and the cap rate given.

f. Calculate the unlevered net present value.

g. Calculate the monthly mortgage payment. What is the total per year?

h. Calculate the loan balance at the end of each year in the holding period.

i. Calculate the amount of principal reduction achieved during each year in the holding period.

j. Calculate the total interest paid during each year in the holding period.

k. Calculate the levered required initial equity investment.

l. Calculate the before-tax cash flow (BTCF) for each year in the holding period.

m. Calculate the before-tax equity reversion (BTER) from the sale of the property.

n. Calculate the levered net present value of this investment.

## Real Estate Finance Help?

November 23rd, 2012 admin