I have already requested the answer for this question. However, they did not use the numbers given. Please show me how to come up with these answers using the 38% operating expense (not 40%). If possible please write out the steps used. I would like to check my answers using the answer your provide. Thank you.

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

Part 1 - Prepare 5 year pro forma operating statement

What is cap rate on the purchase price?

Determine the sales price at the end of year 5

Based on your analysis, what do you think the initial value of the asset is?

If you buy the asset for $20 million, what is your NPV? IRR?