1. (20pts) Consider the following potential investment. A 40-unit apartment building, built in 1980, is listed for sale at a 7.5% cap rate. Assume there are 30 two-bedroom units and 10 three-bedroom units. The two-bedroom units rent for $1,000 per month with one-year leases. The three-bedroom units rent for $1,200 per month. The property has a current vacancy rate of 5% for the three-bedroom units and 5% for the two-bedroom units. An additional income source is laundry services of $10,000 per year. Operating expenses are 50% of effective gross income. Determine the following and show your work.
   1. Gross Potential Rent for the year.

30x1000x12=360,000. 10x1200x12=144,000. 360,000+144,000=504,000

2. Vacancy Amount in $s.

3. Effective Gross Income

4. Net Operating Income

5. Calculate the listing price