Question
Assume the above but now with the following Underwriting information: 200 unit apartment building 1,000 per month average rent 8% vacancy 38% total operating expense
Assume the above but now with the following
Underwriting information:
200 unit apartment building
1,000 per month average rent
8% vacancy
38% total operating expense ratio
Replacement Reserves of $250 per unit per year
3% growth rate
Purchase price is $20 million
Exit cap rate is 7.5%
Sales costs are 2%
Unlevered discount rate is 8%
Assume 5 year holding period
loan information:
Loan principal of $10 million
5% interest rate
30 year term with amortization
2% loan fees
Calculate levered cash flows
Calculate net sales proceeds after debt repayment
What are net loan proceeds?
What is monthly loan payment?
What is effective annual interest rate (effective borrowing cost)?
What is your required equity investment if you buy the asset for $20 million?
What is your equity dividend rate?
What is the DSCR?
If the required return (discount rate) increases to 11%, what is your NPV? Levered IRR?
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