2) Arnold Benedict is thinking of buying an apartment complex that is offered for sale by the firm of Getabinder and Flee. The price, $2.25 million, equals the When you e-mail me the assignment, please make it clear what software package the assignment is in. I can usually access most types of files, if I know what it is in! If I have problems opening the file, I will contact you (so please keep a copy of the filel). Page 1 of 4 property's market value. The following statement of income and expense is presented for Benedict's consideration: The Sated Satyr Apartments Prior Year's Operating Results Presented by Getabinder and Flee, Brokers 30 Units, All Two-Bedroom Apartments, $975 per month Washer and Dryer Rentals Gross Annual Income $351,000 10,000 $361,000 Less Operating Expenses: Manager's Salary Maintenance Staff (one person, part time) Seedy Landscapers Property Taxes $10,000 7,800 1,300 13,000 32 600 Net Operating Income $328,400 By checking the electric meters during an inspection tour of the property, Benedict determines the occupancy rate to be about 80 percent. He learns, by talking to tenants, that most have been offered inducements such as a month's free rent or special decorating allowances. A check with competing apartment houses reveals that similar apartment units rent for about $895 per month and that vacancies average about 7 percent. Moreover, these other apartments have pools and recreation areas that make their units worth about $35 per month more than those of the Sated Satyr, which has neither. The tax assessor states that the apartments were reassessed 12 months ago and that current taxes are $76,374. Benedict learns that the resident manager at Sated Satyr, in addition to a $10,000 salary, gets a free apartment for her services. He also discovers other expenses: insurance will cost $6.50 per $1,000 of coverage, based on estimated replacement cost of about $1.8 million; workers' compensation ($140 per annum) must be paid to the state; utilities, incurred to light hallways and other common areas, cost about $95 per month for similar properties; supplies and miscellaneous expenses typically run about 25 percent of effective gross rent. Professional property management fees in the market area typically are about 5 percent of effective gross income. Based on this information that Benedict obtained and assuming typically competent, professional management, Benedict arrived at the following reconstructed operating statement as shown below: The Sated Satyr Apartments Reconstructed Operating Statement $ 309,600 21,672 7.500 $ 295,428 Potential Gross Rent (30 Units, at $860 per month) Less: Allowance for Vacancies (7 percent) Plus: Other Income (Laundry and vending Machines) Effective Gross Income Less: Operating Expenses: Management Fee (5% of effective gross income) Resident Manager (Salary Plus Free Rent) Utilities Property Insurance Workers' Compensation Insurance Supplies and Miscellaneous (0025 X $299,250) Landscaping and Grounds Maintenance Maintenance and Repairs Property Tax Net Operating Income (Annual) $ 14,771 20,320 1,140 11,700 140 748 3,300 7,800 76.374 136,293 $ 159,135 Given the reconstructed operating statement, you need to do the following (please use the format I have in my online presentations): c. Develop a 5-year amortization schedule for Sated Satyr Apartments assuming that Benedict can obtain a $1,500,000 loan with terms of interest at 8.5 percent per annum and level annual payments to amortize the loan over 20 years. There are no points or loan amortization fees anticipated. d. With information from (b) and (c) above, calculate the BTCFs for each of the 5 year holding period