I know we are only supposed to ask one question but these all come from the same problems and they are needed to answer the following questions

1. What are the default ratios? Will the properties make enough to break even?

2. what are our annual returns? Do these projects "cap rates" meet our requirements for investment?

3. What is our Edr for each investment and is it higher than the "cap rate"?

4. on the same note, what are the mortgage constants and are they lower than the "cap rate"?

5. what is the DCR for each? Would a bank consider their debt coverage ratios satisfactory?

6. What are the OERs and which of the two would an investor prefer if the prices and down payments were the same?

7. which of the two investments would we rather own? And give one reason why

c c 1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle . Styles Paragraph The Property's Reconstructed Income and Expense Statement Purchase Price: $2,100,000 Intial Equity = $525.000 Discount Rate = 10% Revenues: 40 Apartments Year 1 28 Mo bedroom unts monthly rent 12 one bedroom unts mostly rent $1,250 $420,000 $1000 $144,000 Parking Fees: $15 per month for the 2nd ca $25 per month for covered parking $5,040 $12.000 $4.500 Laundry Room Collections Potential Gross Income less vacancies 10.00% $585,540 $58,544 $525,996 Elective Gross Income Total Expenses $315,000 $211,995 Net Operating Income $135,405 Debt Service $76,591 Before Tex Cash Flow 12 The Property Reconstructed Income and Expense Statement Purchase Price = $2,500,000 Initial Equity = $750,000 Discount Rate : 10% Revenues: 50 Apartments Year 1 tu $1,200 35 wo bedroom units monthly rent 14 one bedroom unts marthly rent $518,400 $159,600 $950 Parking Fees $6,480 $15 per month for the 2nd Car $25 per month for covered parking $15,000 $6,500 Laundry Room Collections Polencial Gross Income less vacancies Ellective Gross Income 1000% $705,980 $70,598 $635,382 Total Expenses $375,000 Net Operating Income $260,382 Debt Service $150,451 Before Tax Cash Flow $109,931