20 apartments that rent for $1000 per month each 5% Vacancy rate Expenses: Variable expense ratio of 20% of effective rent plus fixed expenses (not including mortgage) of $22,400 Interest: 5% Monthly Debt Service $9900 REQUIRED:

1. Calculate the NOI.

2. Identify the Sales price based on the following capitalization rates:

a. 8%

b. 10%,

c. 12%

d. Which is better for the buyer? The seller?

3. Identify the break-even point in rent? Units?

4. If the above complex is purchased for the price in answer 1 A, and the bank will loan based on a 75% LTV, how much must the buyer invest? What is the first year ROI based on Net Cash Flow before depreciation and taxes? The investment used is the answer to Question 3 above.