Assignment You are an investor looking to acquire a 150 unit apartment in Gainesville, Fl. It is a Class B property with no major damages. You can purchase the property for $10,750,000 today and you charge $850 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 5% annually since you account for some tenants not paying their rent on time even though you have 100% occupancy. You assume 60% of your tenants will need parking so you charge $75 a month for their parking spot. Every year maintenance and utilities will cost you $250,000 and it will grow at 2.5% yearly. You think that based on your market projections, you can sell your property in 5 years for $11,250,000 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%, a 14% levered return before taxes, and a 9.8% levered return after taxes on the property. Furthermore, you successfully acquired the property with 60% financed by ABC Bank with a 15-year fixed interest rate loan at 4.25% per year. You will have to pay 3% in loan expenses and you plan on using an amortization term of 15 years making this a fixed interest rate fully amortized loan. You will have yearly taxes of $115,000 for the next 5 years and you will have taxes due on sale of 4% on the property. Once you complete the model, answer the quiz questions in canvas. Question 5 10 pts What is your "Levered Before Tax" IRR? 21.20% 20.21% 18.49% 19.32% D Question 6 10 pts If your taxes due on sale increase by 2%, by what percentage will your "Levered Before Tax"IRR decrease? 0.0096 2.00% 0 2.47% 1.24% Assignment You are an investor looking to acquire a 150 unit apartment in Gainesville, Fl. It is a Class B property with no major damages. You can purchase the property for $10,750,000 today and you charge $850 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 5% annually since you account for some tenants not paying their rent on time even though you have 100% occupancy. You assume 60% of your tenants will need parking so you charge $75 a month for their parking spot. Every year maintenance and utilities will cost you $250,000 and it will grow at 2.5% yearly. You think that based on your market projections, you can sell your property in 5 years for $11,250,000 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%, a 14% levered return before taxes, and a 9.8% levered return after taxes on the property. Furthermore, you successfully acquired the property with 60% financed by ABC Bank with a 15-year fixed interest rate loan at 4.25% per year. You will have to pay 3% in loan expenses and you plan on using an amortization term of 15 years making this a fixed interest rate fully amortized loan. You will have yearly taxes of $115,000 for the next 5 years and you will have taxes due on sale of 4% on the property. Once you complete the model, answer the quiz questions in canvas. Question 5 10 pts What is your "Levered Before Tax" IRR? 21.20% 20.21% 18.49% 19.32% D Question 6 10 pts If your taxes due on sale increase by 2%, by what percentage will your "Levered Before Tax"IRR decrease? 0.0096 2.00% 0 2.47% 1.24%