BEFORE TAX INVESTMENT ANALYSIS OF AN APARTMENT BUILDING Assume a 3 year holding period for the investment INPUTS NUMBER OF UNITS RENT-- MONTHLY RENT GROWTH VACANCY RATE FIXED EXPENSES VARIABLE EXPENSES RESERVES FOR REPLACEMENT FIXED EXPENSE GROWTH VARIABLE EXPENSE GROWTH RESERVE ACCOUNT APPRECIATION (TOTAL FOR HOLDING PERIOD ACQUISITION PRICE LOAN TO VALUE RATIO LOAN AMOUNT MORTGAGE INTEREST RATE UPFRONT FINANCING COSTS OF LOAN AMOUNT LOAN PAYMENT -- MONTHLY LOAN TERM - YEARS INVESTOR'S REQUIRED RATE OF RETURN SELLING COST HOLDING PERIOD - YEARS 4 $940 4.00% 6.00% $6,000.00 $5,400.00 $4,500.00 3.50% 3.50% 3.00% 12.00% $297,000 80% $237,600 6.25% 2.75% 30 13.00% 3 Question 16 (2.5 points) The potential gross income (PGI) in year 3 is: $46,800 O $48,433 O $48,802 $49,321 Question 17 (2.5 points) The effective gross income (EGI) in year 2 is: O $41,404 $43,103 $42,526 $44,109 Question 18 (2.5 points) The net operating income (NOI) in year 1 is: $26,513 $28,233 $29,647 $27,287 Question 19 (2.5 points) The debt service (DS) in year 2 is: $17,847 $18,352 $18,115 $17,555 BEFORE TAX INVESTMENT ANALYSIS OF AN APARTMENT BUILDING Assume a 3 year holding period for the investment INPUTS NUMBER OF UNITS RENT-- MONTHLY RENT GROWTH VACANCY RATE FIXED EXPENSES VARIABLE EXPENSES RESERVES FOR REPLACEMENT FIXED EXPENSE GROWTH VARIABLE EXPENSE GROWTH RESERVE ACCOUNT APPRECIATION (TOTAL FOR HOLDING PERIOD ACQUISITION PRICE LOAN TO VALUE RATIO LOAN AMOUNT MORTGAGE INTEREST RATE UPFRONT FINANCING COSTS OF LOAN AMOUNT LOAN PAYMENT -- MONTHLY LOAN TERM - YEARS INVESTOR'S REQUIRED RATE OF RETURN SELLING COST HOLDING PERIOD - YEARS 4 $940 4.00% 6.00% $6,000.00 $5,400.00 $4,500.00 3.50% 3.50% 3.00% 12.00% $297,000 80% $237,600 6.25% 2.75% 30 13.00% 3 Question 16 (2.5 points) The potential gross income (PGI) in year 3 is: $46,800 O $48,433 O $48,802 $49,321 Question 17 (2.5 points) The effective gross income (EGI) in year 2 is: O $41,404 $43,103 $42,526 $44,109 Question 18 (2.5 points) The net operating income (NOI) in year 1 is: $26,513 $28,233 $29,647 $27,287 Question 19 (2.5 points) The debt service (DS) in year 2 is: $17,847 $18,352 $18,115 $17,555