ASSUMPTIONS: Asking Price 3,000,000 Rent year 1 688,000 Growth-Rent 2% Vacancy & Coll. Loss 10% of rents Management 5% of EGI 120,000 70% 10% Operating Expenses Loan-to-value Loan Interest Loan term Growth in Value/Op Expenses Holding Period Selling costs Equity discount rate 25 years 4% 4 years 4% of sale price 12% Reinvestment rate 7% Tax rate 40% Cap Gains/Dep Recapture Tax 15% Equity 900,000 Loan 2,100,000 Montly Mortgage Payment 19,083 Annual Debt Service 231,353 Mortgage Balance year end 4 Year 1 2 3 4 5 PGI Vacancy & Collection Loss EGI Operating Expenses Mangement NOI Debt Service BTCF