1 of 3 LENDER UNDERWRITING OPERATING STATEMENT CASE STUDY: You intend to purchase a duplex for $200,000 and obtain an 80% loan at 5% interst for 30 years. The lender wants to examine the purchase in order to determine the amount of one year cash flow; either positive or negative. The lender's appraiser is assigned to completing the operating statement for the lender FACTS: Annual Income: Both units are currently rented for $1.400 per month. The appraiser expects 8% vacancy/rent loss for the year. Annual Expenses: The tenants are responsible for all utilities. However, the appraiser has included $300 for pest control and $500 for landscape maintenance Interior expense is projected to be $1,000 total and general maintenance is projected to be $1,000. Other investors are paying 5% of EGI annually for management expense. Supply expense is estimated to be $200. The units were recently remodeled with new roof and flooring, new AC units and furnaces as well as new water heaters. The kitchen appliances are ten years old with an expected remaining life of ten years. The cost new of the appliances are: stove/range $700, refrigerator $800 and dishwasher $400 Monthly housing expense (PITI) includes the principle and interest on the proposed loan _$800 annual hazard insurance/12 months and $4,500 annual property taxes/12 months. What is the net monthly cash flow reported to the lender? 2 of 3 PAGE ONE Anna come and Expenses Projection for at 12 months But Income Do not forger-pant Gross Amulett e Other Income sources Toa Less Vacancy PartLoss Efective room Expenses Domaine pense feronerplants Gas Fuel wie Sewer Trash Removal Pest Control Other Toes or Lenses Casual Labor This includes the costs for public ars cleaning snow removal, et even though the applicant may not be contract for such Services Interior Paint Decorating This includes the costs of contract labor and materials that are required to maintain the interiors of the living unt General Repairs Maintenance This includes the costs of contract labor and materials that are required to maintain the public concors, staways, roofs, mechanical systems grounds, etc Management Expenses These are the customersperses that a professional management company would change to manage the property Spoles This includes the costs of amlike light bulbs jantonal supplies, et Total Replacement Reserves - See Schedule on Pg 2 Miscellaneous Total Operating Expenses PAGE TWO Replacement Reserve Schedule Adequateraplacent reserves must be calculated regardess of whether actual reserves as provided for on the owners operating statements or are customary in the local market This represents the tal average yearly reservas General, al coupert and components that have a remaining of more than one year-such as refrigerators, stoves clothes washers thyers, trash compactors forces, roofs, and carpeting - should be expensed on a replacement cost basis. Equipment Remaining Replacement Cost By Applicant Appraise Lender Adjustments Stoves Ranges Refrigerators AC Units C. Washer Dryers HW Heaters Furnace (Other) Units = $ Units = 5 Units - 5 Units = 5 Units = 5 Uns- Units - Units - $ 82. YSX - Roof _Yrs. x One Blog S Carpeting Wal to Wall) (Units) Public Areas) Remaining Life Per Sq. Yd- _ Yrs. Per Sq. Yd - _Y's Total 80. Yds@ $ Total 80. Yds @ $ $ $ Total Replacement Reserves. (Enter on Pg 1) Operating Income Reconciliation _ -12- Efective Gros regione come Taratz Vorrang income Vory Founge n este more No Mortly Housing Expens includes principal and interest on the mortgage hazard insurance e insurance premis HOA Cues, leasehold payments and subordina francing parents 2 of 3 PAGE ONE Anna come and Expenses Projection for at 12 months But Income Do not forger-pant Gross Amulett e Other Income sources Toa Less Vacancy PartLoss Efective room Expenses Domaine pense feronerplants Gas Fuel wie Sewer Trash Removal Pest Control Other Toes or Lenses Casual Labor This includes the costs for public ars cleaning snow removal, et even though the applicant may not be contract for such Services Interior Paint Decorating This includes the costs of contract labor and materials that are required to maintain the interiors of the living unt General Repairs Maintenance This includes the costs of contract labor and materials that are required to maintain the public concors, staways, roofs, mechanical systems grounds, etc Management Expenses These are the customersperses that a professional management company would change to manage the property Spoles This includes the costs of amlike light bulbs jantonal supplies, et Total Replacement Reserves - See Schedule on Pg 2 Miscellaneous Total Operating Expenses PAGE TWO Replacement Reserve Schedule Adequateraplacent reserves must be calculated regardess of whether actual reserves as provided for on the owners operating statements or are customary in the local market This represents the tal average yearly reservas General, al coupert and components that have a remaining of more than one year-such as refrigerators, stoves clothes washers thyers, trash compactors forces, roofs, and carpeting - should be expensed on a replacement cost basis. Equipment Remaining Replacement Cost By Applicant Appraise Lender Adjustments Stoves Ranges Refrigerators Dishwashers AC Units C. Washer Dryers HW Heaters Furnace (Other) Units = $ Units = 5 Units - 5 Units = 5 Units = 5 Uns- Units - Units - $ 82. YSX - Roof _Yrs. x One Blog S Carpeting Wal to Wall) (Units) Public Areas) Remaining Life Per Sq. Yd- _ Yrs. Per Sq. Yd - _Y's Total 80. Yds@ $ Total 80. Yds @ $ $ $ Total Replacement Reserves. (Enter on Pg 1) Operating Income Reconciliation _ -12- Efective Gros regione come Taratz Vorrang income Vory Founge n este more No Mortly Housing Expens includes principal and interest on the mortgage hazard insurance e insurance premis HOA Cues, leasehold payments and subordina francing parents