Can you calculate the following?Are my numbers right? what is the formula for calculating the equity multiplier?

Merge \& Center * fx A. 8 C E G H Choose not to renovation scenario \begin{tabular}{|c|c|} \hline Year: & 0 \\ \hline Purchase Price & $15,125,000 \\ \hline plus Renovation Expenses & so \\ \hline \begin{tabular}{l} Total Acquistion Cost \\ less CMBS Loan Amount \end{tabular} & \begin{tabular}{l} $15,125,000 \\ $10,780,000 \end{tabular} \\ \hline Equity & $4,345,000 \\ \hline \end{tabular} Rental income growth rate Non-rental income growth rate Vacancy and collection loss rate Operating expense ratio 1 2 3 4 Terminal cap rate Selling cost Prepaymem Penalty Rental Income plus Non-rental income Gross Potential income less Vacancy and collection Loss Gross Effective income less Operating Gopenses Net Operating Income less Debt Service before Tax Cash Hlow from Operatiom $1,547,220 $1,593,637 3.0% 3.0% 10.0% 26.8% \begin{tabular}{|r|r|r|} \hline 3.0% & 3.0% \\ \hline 3.0% & 3.0% \\ \hline 10.0% & 10.0% \\ \hline 26.8% & 26.8% \\ \hline \end{tabular} $2,993 $2,993 7.5s 2.0% 1.08 $1,993$1,596,630$2,993$1,644,439$2,993$1,693,682 $1,550,213 $155,021 $164,444 $1,693,368 $1,524,314 $415,457 $1,479,995$440,710$1,039,286$1,524,314$453,907$1,070,407 $9644737 5964,473 $74,812 Expected Selling Price $14,272,098 less Selling Costs $285,442 Sales Proceeds $13,986,656 less Mortgage Balance $9,226,507 $107,800 54,760,1888 less Prepayment Penalty $4,760,148 Before Tax Cash flow from the sale Totat Before Tax Cash Flows .$4,345,000 $15,261 $44,597 $74,812 Autosave Home Insert Paste Draw Calibri (Body) B I U II a A. Formulas Data Review View Automate Tell me Wrap Text Merge 8 Center E41 ^ fx Page Layout 11 ) Merge B. Center v General 5=%,400 A B C D E F G Purchase Price plus Renovation Expenses Total Acquisition Cost less CMBS Loan Amount \begin{tabular}{|rr} \hline Equity & $10,780,000 \\ \hline \end{tabular} Rental income growth rate Non-rental income growth rate Vacancy and collection loss rate Operating expense ratio Terminal cap rate Selling Cost Prepayment Penalty \begin{tabular}{r} $15,125,000 \\ $0 \\ $15,125,000 \\ $10,780,000 \\ \hline$4,345,000 \end{tabular} EXCEL Commons at Sawmill TEMPLATE \begin{tabular}{|c|c|} \hline \multicolumn{1}{|c|}{C} & D \\ \hline$15,125,000 \\ \hline$0 \\ $15,125,000 \\ $10,780,000 \\ \hline$4,345,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{2}{|l|}{ Rental Income } & $1,547,220 & $1,593,637 & $1,641,446 \\ \hline plus Non-rental income & & $2,993 & $2,993 & $2,993 \\ \hline Gross Potential Income & c & $1,550,213 & $1,596,630 & $1,644,439 \\ \hline less Vacancy and Collection Loss & & $155,021 & $159,663 & $164,444 \\ \hline Gross Effective Income & & $1,395,192 & $1,436,967 & $1,479,995 \\ \hline less Operating Expenses & & $415,457, & $427,897 & $440,710 \\ \hline Net Operating Income & & $979,735 & $1,009,070 & $1,039,286 \\ \hline less Debt Service & & $964,473r & $964,473r & $964,473 \\ \hline Before Tax Cash Flow from Operations & & $15,261 & $44,597 & $74,812 \\ \hline & & & & \\ \hline Expected Selling Price & & & & $14,272,098 \\ \hline less Selling Costs & & & & $285,442 \\ \hline Sales Proceeds & + & & & $13,986,656 \\ \hline less Mortgage Balance & & & & $9,226,507 \\ \hline less Prepayment Penalty & & & & $107,800 \\ \hline \multirow[t]{2}{*}{ Before Tax Cash Flow from the Sale } & & & & $4,760,148 \\ \hline & & & & \\ \hline Total Before Tax Cash Flows & $4,345,000 & $15,261 & $44,597 & $74,812 \\ \hline Going-in cap rate & 8% & 6 - Calculate & & \\ \hline Equity Multiplier & 0.29 & & A & \\ \hline Before Tax IRR & 72.7% & & & 7 \\ \hline PV of BTCF from Sale @IRR Rate & $11,868,034 & & & \\ \hline Percent of Equity & 2.73 & PV in cell CAO/E/O & cell C36 & \\ \hline \end{tabular} The Bascom Group, LLC ("Bascom") was formed in 1996 by Derek Chen, Jerome Fink, and David Kim. The original business plan was to identify, acquire, and renovate 300 to 500 unit apartment properties in desirable locations. Primary sources of properties for their strategy include foreclosures, short sales, and repositions. Since 1996, Bascom has purchased and renovated 163,118 apartments and completed over $16.2B in multifamily and commercial valueadd transactions in Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Nevada, New York, the Pacific Northwest, Tennessee, Texas, Utah, Washington and other select markets in the U.S. Since its founding, Bascom has supported local community groups. The company encourages employees to volunteer 10 hours per quarter to an institution of their choice. Bascom matches hours spent volunteering with additional vacation time. In 2015, Bascom employees completed over 100 hours of volunteer work with local charitable organizations. Bascom's professional and community outreach efforts have been recognized by numerous professional and charitable organizations. Bascom was recognized as one of the Best Places to Work in Multifamily, was a Finalist for the Best Repositioning of a Multifamily Asset by the National Associate of Home Builders; and by Ernst and Young as the Entrepreneur of the Year. Bascom is currently evaluating the acquisition of a value-add multifamily property in Flagstaff, AZ. The Commons at Sawmill is a 194 unit apartment community located at 901 South O Leary Street in Flagstaff. Built in 1992, the property suffers from substantial deferred maintenance and has an archaic exterior, interior water damage, mold, failing appliances and outdated interiors. Failing single-pane windows and exterior concrete masonry unit (CMU), or concrete block, construction has created significant mold problems throughout the property that will require extensive repairs. In addition to updating, the exterior faade will need better moisture protection. The property is well located in the Flagstaff apartment market. It is adjacent to the University of Northem Arizona, home to about 17,500 students. In addition, the property is within walking distanec of downtown Flagstaff and Aspen Place at the Sawmill-a neighborhood shopping center containing over 30 restaurants and retail establishments, including a Whole Foods grocery store and an REI. The property is pet-friendly and close to walking/hiking/bicycling trails. The property is located about 6.5 miles from the Flagstaff Pulliam Airport. $10.780MM with 20 years remaining on the loan's amortization period. The annual interest rate on the monthly payment mortgage is 6.5%. There is a 1% prepayment penalty if the loan is repaid prior to maturity. Bascom estimates that the renovations will cost $4.055MM ( $20,902/ unit). The renovations will commence immediately after the property is acquired. Rents have not changed in years and Bascom estimates that it will be able to increase rents about 52% from their current levels following the renovation. For purposes of the investment pro-forma you may assume that the renovation expenses and subsequent rent increases will occur at acquisition. Exhibit 1 provides the unit sizes, number of apartments, and both pre-renovation and postrenovation rents for the property. Currently, the average rent for studio apartments is $415.00/ month; $665.00/ month for two-bedroom units and $910.00 /month for three-bedroom units. If the property is not renovated, the first year's annual rental income is expected to be $1,547,220. The rents in Exhibit 1 are end of year 1 rents. Rental income is expected to increase 3% per year for the foreseeable future (Exhibit 2 ). In addition to rental income, the property is expected to generate an additional $99,780 in non-rental income (application fees, pet deposits and fees, and parking revenue). Non-rental income is also expected to increase 3% per year. The current vacancy and collection loss rate is 10.0% and the current operating expense ratio is 26.8%. These rates are expected to remain constant over the next four years. The renovations will allow Bascom to increase average rents for studio apartments to $632.14; to $1,012.95 for two-bedroom units and to $1,386.15 for three-bedroom units. The renovations will also allow Bascom to increase rents 6% per year. The $99,780 in non-rental income is expected to increase 3% per year. The renovations are expected to reduce the vacancy and collection loss rate to 5% and the operating expense ratio to 17.6%. The renovations will allow Bascom to increase average rents for studio apartments to $632.14; to $1,012.95 for two-bedroom units and to $1,386.15 for three-bedroom units. The renovations will also allow Bascom to increase rents 6% per year. The $99,780 in non-rental income is expected to increase 3% per year. The renovations are expected to reduce the vacancy and collection loss rate to 5% and the operating expense ratio to 17.6%. Exhibit 1 Rent Roll Exhibit 2 Pro-forma Assumptions Restrictions on the CMBS loan will require Bascom to fund all the renovation expenses with equity. Without renovating, Bascom estimates that it will be able to sell the property at a terminal cap rate of 7.5% at the end of three years. Capitalize the year 4 NOI to estimate the selling price. With renovations, the terminal cap rate is expected to be 6.1%. In either case, Bascom will have to pay a 2% selling commission when the property is sold. Develop pro-formas that estimate expected cash flows for this income producing property for a three-year holding period if: (1) the property is not renovated; and (2) if the property is renovated. In addition, compute the expected return on the renovation cash flows. Merge \& Center * fx A. 8 C E G H Choose not to renovation scenario \begin{tabular}{|c|c|} \hline Year: & 0 \\ \hline Purchase Price & $15,125,000 \\ \hline plus Renovation Expenses & so \\ \hline \begin{tabular}{l} Total Acquistion Cost \\ less CMBS Loan Amount \end{tabular} & \begin{tabular}{l} $15,125,000 \\ $10,780,000 \end{tabular} \\ \hline Equity & $4,345,000 \\ \hline \end{tabular} Rental income growth rate Non-rental income growth rate Vacancy and collection loss rate Operating expense ratio 1 2 3 4 Terminal cap rate Selling cost Prepaymem Penalty Rental Income plus Non-rental income Gross Potential income less Vacancy and collection Loss Gross Effective income less Operating Gopenses Net Operating Income less Debt Service before Tax Cash Hlow from Operatiom $1,547,220 $1,593,637 3.0% 3.0% 10.0% 26.8% \begin{tabular}{|r|r|r|} \hline 3.0% & 3.0% \\ \hline 3.0% & 3.0% \\ \hline 10.0% & 10.0% \\ \hline 26.8% & 26.8% \\ \hline \end{tabular} $2,993 $2,993 7.5s 2.0% 1.08 $1,993$1,596,630$2,993$1,644,439$2,993$1,693,682 $1,550,213 $155,021 $164,444 $1,693,368 $1,524,314 $415,457 $1,479,995$440,710$1,039,286$1,524,314$453,907$1,070,407 $9644737 5964,473 $74,812 Expected Selling Price $14,272,098 less Selling Costs $285,442 Sales Proceeds $13,986,656 less Mortgage Balance $9,226,507 $107,800 54,760,1888 less Prepayment Penalty $4,760,148 Before Tax Cash flow from the sale Totat Before Tax Cash Flows .$4,345,000 $15,261 $44,597 $74,812 Autosave Home Insert Paste Draw Calibri (Body) B I U II a A. Formulas Data Review View Automate Tell me Wrap Text Merge 8 Center E41 ^ fx Page Layout 11 ) Merge B. Center v General 5=%,400 A B C D E F G Purchase Price plus Renovation Expenses Total Acquisition Cost less CMBS Loan Amount \begin{tabular}{|rr} \hline Equity & $10,780,000 \\ \hline \end{tabular} Rental income growth rate Non-rental income growth rate Vacancy and collection loss rate Operating expense ratio Terminal cap rate Selling Cost Prepayment Penalty \begin{tabular}{r} $15,125,000 \\ $0 \\ $15,125,000 \\ $10,780,000 \\ \hline$4,345,000 \end{tabular} EXCEL Commons at Sawmill TEMPLATE \begin{tabular}{|c|c|} \hline \multicolumn{1}{|c|}{C} & D \\ \hline$15,125,000 \\ \hline$0 \\ $15,125,000 \\ $10,780,000 \\ \hline$4,345,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{2}{|l|}{ Rental Income } & $1,547,220 & $1,593,637 & $1,641,446 \\ \hline plus Non-rental income & & $2,993 & $2,993 & $2,993 \\ \hline Gross Potential Income & c & $1,550,213 & $1,596,630 & $1,644,439 \\ \hline less Vacancy and Collection Loss & & $155,021 & $159,663 & $164,444 \\ \hline Gross Effective Income & & $1,395,192 & $1,436,967 & $1,479,995 \\ \hline less Operating Expenses & & $415,457, & $427,897 & $440,710 \\ \hline Net Operating Income & & $979,735 & $1,009,070 & $1,039,286 \\ \hline less Debt Service & & $964,473r & $964,473r & $964,473 \\ \hline Before Tax Cash Flow from Operations & & $15,261 & $44,597 & $74,812 \\ \hline & & & & \\ \hline Expected Selling Price & & & & $14,272,098 \\ \hline less Selling Costs & & & & $285,442 \\ \hline Sales Proceeds & + & & & $13,986,656 \\ \hline less Mortgage Balance & & & & $9,226,507 \\ \hline less Prepayment Penalty & & & & $107,800 \\ \hline \multirow[t]{2}{*}{ Before Tax Cash Flow from the Sale } & & & & $4,760,148 \\ \hline & & & & \\ \hline Total Before Tax Cash Flows & $4,345,000 & $15,261 & $44,597 & $74,812 \\ \hline Going-in cap rate & 8% & 6 - Calculate & & \\ \hline Equity Multiplier & 0.29 & & A & \\ \hline Before Tax IRR & 72.7% & & & 7 \\ \hline PV of BTCF from Sale @IRR Rate & $11,868,034 & & & \\ \hline Percent of Equity & 2.73 & PV in cell CAO/E/O & cell C36 & \\ \hline \end{tabular} The Bascom Group, LLC ("Bascom") was formed in 1996 by Derek Chen, Jerome Fink, and David Kim. The original business plan was to identify, acquire, and renovate 300 to 500 unit apartment properties in desirable locations. Primary sources of properties for their strategy include foreclosures, short sales, and repositions. Since 1996, Bascom has purchased and renovated 163,118 apartments and completed over $16.2B in multifamily and commercial valueadd transactions in Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Nevada, New York, the Pacific Northwest, Tennessee, Texas, Utah, Washington and other select markets in the U.S. Since its founding, Bascom has supported local community groups. The company encourages employees to volunteer 10 hours per quarter to an institution of their choice. Bascom matches hours spent volunteering with additional vacation time. In 2015, Bascom employees completed over 100 hours of volunteer work with local charitable organizations. Bascom's professional and community outreach efforts have been recognized by numerous professional and charitable organizations. Bascom was recognized as one of the Best Places to Work in Multifamily, was a Finalist for the Best Repositioning of a Multifamily Asset by the National Associate of Home Builders; and by Ernst and Young as the Entrepreneur of the Year. Bascom is currently evaluating the acquisition of a value-add multifamily property in Flagstaff, AZ. The Commons at Sawmill is a 194 unit apartment community located at 901 South O Leary Street in Flagstaff. Built in 1992, the property suffers from substantial deferred maintenance and has an archaic exterior, interior water damage, mold, failing appliances and outdated interiors. Failing single-pane windows and exterior concrete masonry unit (CMU), or concrete block, construction has created significant mold problems throughout the property that will require extensive repairs. In addition to updating, the exterior faade will need better moisture protection. The property is well located in the Flagstaff apartment market. It is adjacent to the University of Northem Arizona, home to about 17,500 students. In addition, the property is within walking distanec of downtown Flagstaff and Aspen Place at the Sawmill-a neighborhood shopping center containing over 30 restaurants and retail establishments, including a Whole Foods grocery store and an REI. The property is pet-friendly and close to walking/hiking/bicycling trails. The property is located about 6.5 miles from the Flagstaff Pulliam Airport. $10.780MM with 20 years remaining on the loan's amortization period. The annual interest rate on the monthly payment mortgage is 6.5%. There is a 1% prepayment penalty if the loan is repaid prior to maturity. Bascom estimates that the renovations will cost $4.055MM ( $20,902/ unit). The renovations will commence immediately after the property is acquired. Rents have not changed in years and Bascom estimates that it will be able to increase rents about 52% from their current levels following the renovation. For purposes of the investment pro-forma you may assume that the renovation expenses and subsequent rent increases will occur at acquisition. Exhibit 1 provides the unit sizes, number of apartments, and both pre-renovation and postrenovation rents for the property. Currently, the average rent for studio apartments is $415.00/ month; $665.00/ month for two-bedroom units and $910.00 /month for three-bedroom units. If the property is not renovated, the first year's annual rental income is expected to be $1,547,220. The rents in Exhibit 1 are end of year 1 rents. Rental income is expected to increase 3% per year for the foreseeable future (Exhibit 2 ). In addition to rental income, the property is expected to generate an additional $99,780 in non-rental income (application fees, pet deposits and fees, and parking revenue). Non-rental income is also expected to increase 3% per year. The current vacancy and collection loss rate is 10.0% and the current operating expense ratio is 26.8%. These rates are expected to remain constant over the next four years. The renovations will allow Bascom to increase average rents for studio apartments to $632.14; to $1,012.95 for two-bedroom units and to $1,386.15 for three-bedroom units. The renovations will also allow Bascom to increase rents 6% per year. The $99,780 in non-rental income is expected to increase 3% per year. The renovations are expected to reduce the vacancy and collection loss rate to 5% and the operating expense ratio to 17.6%. The renovations will allow Bascom to increase average rents for studio apartments to $632.14; to $1,012.95 for two-bedroom units and to $1,386.15 for three-bedroom units. The renovations will also allow Bascom to increase rents 6% per year. The $99,780 in non-rental income is expected to increase 3% per year. The renovations are expected to reduce the vacancy and collection loss rate to 5% and the operating expense ratio to 17.6%. Exhibit 1 Rent Roll Exhibit 2 Pro-forma Assumptions Restrictions on the CMBS loan will require Bascom to fund all the renovation expenses with equity. Without renovating, Bascom estimates that it will be able to sell the property at a terminal cap rate of 7.5% at the end of three years. Capitalize the year 4 NOI to estimate the selling price. With renovations, the terminal cap rate is expected to be 6.1%. In either case, Bascom will have to pay a 2% selling commission when the property is sold. Develop pro-formas that estimate expected cash flows for this income producing property for a three-year holding period if: (1) the property is not renovated; and (2) if the property is renovated. In addition, compute the expected return on the renovation cash flows