Assignment You are an investor looking to acquire a 100 unit apartment in Gainesville, FL. It is a Class A property with no major damages (no capital expenditures needed). You can purchase the property for $8,750,000 today and you charge $1,000 a month for each unit on a 12 month lease. You also believe that your rent will grow at a constant yearly rate of 1.5% and project that you will have vacancy and collection losses of 3% annually to account for any of the 100 tenants to not pay a portion of their rent. You are assuming all tenants will need parking so you charge $50 a month for their parking spot (miscellaneous income). Every year maintenance and utilities will cost you $200,000 (Operating Expenses) and it will grow at 1.5% yearly. You think that based on your market projections, you can sell your property in 5 years for $10,500,000 and you expect there to be selling expenses of 6%. You will not invest in this property unless you can realize an unlevered before tax return of 10%. Once you complete the model, answer the quiz questions in canvas. Discounted Cash Flow Assumptions Monthly Rent Per Unit Number of Units Rent Growth (YEARLY) Vacancy/Collection Losses Miscellaneous Income Per Month Opx (YEARLY) OpX Growth (YEARLY) Purchase Price (YEAR O) Sale Price (YEAR 5) Selling Expense Require Return (RR) Unlevered Before Tax 5 Year Proforma YR 2 YR 1 YR 3 YR 4 YR 5 Potential Gross Income Vacancy and Collection Miscellaneous Income Effective Gross Income Opx Net Operating Income Important Calculations Sale Price Selling Expenses Net Sales Proceeds Cash Flow From Operations YR 1 YR 2 YRO YR 3 YR 4 YR 5 Unlevered Before Tax Valuations NPV IRR Unlevered Before Tax Assignment You are an investor looking to acquire a 100 unit apartment in Gainesville, FL. It is a Class A property with no major damages (no capital expenditures needed). You can purchase the property for $8,750,000 today and you charge $1,000 a month for each unit on a 12 month lease. You also believe that your rent will grow at a constant yearly rate of 1.5% and project that you will have vacancy and collection losses of 3% annually to account for any of the 100 tenants to not pay a portion of their rent. You are assuming all tenants will need parking so you charge $50 a month for their parking spot (miscellaneous income). Every year maintenance and utilities will cost you $200,000 (Operating Expenses) and it will grow at 1.5% yearly. You think that based on your market projections, you can sell your property in 5 years for $10,500,000 and you expect there to be selling expenses of 6%. You will not invest in this property unless you can realize an unlevered before tax return of 10%. Once you complete the model, answer the quiz questions in canvas. Discounted Cash Flow Assumptions Monthly Rent Per Unit Number of Units Rent Growth (YEARLY) Vacancy/Collection Losses Miscellaneous Income Per Month Opx (YEARLY) OpX Growth (YEARLY) Purchase Price (YEAR O) Sale Price (YEAR 5) Selling Expense Require Return (RR) Unlevered Before Tax 5 Year Proforma YR 2 YR 1 YR 3 YR 4 YR 5 Potential Gross Income Vacancy and Collection Miscellaneous Income Effective Gross Income Opx Net Operating Income Important Calculations Sale Price Selling Expenses Net Sales Proceeds Cash Flow From Operations YR 1 YR 2 YRO YR 3 YR 4 YR 5 Unlevered Before Tax Valuations NPV IRR Unlevered Before Tax
