Apartment Complex:

15 1-Bedroom Units renting for $800/month

10 2-Bedroom Units renting for $950/month

5 3-Bedroom Units renting for $1100/month

Other Income is 2% of the Potential Gross Rent

Vacancy Allowance is 8% of Potential Gross Income

Loss Allowance is 3% of Potential Gross Income

Operating Expenses are 46% of Effective Gross Income

Current Market Lending Terms:

25-yr term, Interest Rate of 4.75%, 70% LTV, DCR = 1.30

BV/TV = 0.6 (use this to calculate the building value at 60% of the total property value)

Total property value = $2,650,000

COLA / Inflation is expected to be 2%

Sales Expense is 3.0%

Calculate the Cash Flows, IRR & NPV for an Individual Owner (Head of Household).