Question
Fill in the blanks and create a 10 year proforma spreadsheet similar to what is found on pages 303 -305 in your book. Write a
Fill in the blanks and create a 10 year proforma spreadsheet similar to what is found on pages 303 -305 in your book. Write a 3 to 5 page summary stating what you did to fill in the blanks of the Proforma and what were the results as to If this is a good deal.
Ten year Project 120 unit Apartment Complex
Purchase Price: $3,056,600
Holding Period: 10 Years
Depreciation in years: 30
Land Value % of Price: 25%
Loan to Value: 70%
Term of Loan: 20 years
Points to close: 2%
Interest Rate: 6.5%
Prepayment Penalty 1% of the loan before 15 years
Investor Tax Rate 34%
Growth rate in rents: 4.5%
Vacancy Rate: 13%
Cap rate for resale: 12% Going out Cap rate
Selling Costs: 7% of selling price
Capital gain s Tax Rate: 15%
Target Equity IRR after Tax: 12%
(Remember if on lease other than month to month cannot increase rent until lease is up. Assume lease term ends at period (ie. 1 Year leases end in 1 year and 2 year in 2 years. Also assume similar rotation for each year). Property Valuation: Assume Property increases in value at rate if inflation. (Remember if on lease other than month to month cannot increase rent until lease is up. Assume lease term ends at period (ie. 1 Year leases end in 1 year and 2 year in 2 years. Also assume similar rotation for each year). Property Valuation: Assume Property increases in value at rate if inflationStep by Step Solution
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