Income Approach Given the following owner's income and expense estimates for an apartment property, formulate a reconstructed operating statement. The building consists of 10 units that could rent for SS500 per month each. 46,000 Owner's Annual Income Statement Rental income (last year) 5660,000 Less: Operating & capital expenses Power $22.000 Heat 17,000 Janitor Water 37,000 Maintenance 48.000 Reserve for capital expenditures 31.000 Management 30,000 Tax depreciation 50,000 Mortgage payments 63.000 Estimating vacancy and collection losses at 5 percent of potential gross income reconstruct the operating statement to obtain an estimate of NOI. Assume an above-line treatment of CAPX. Remember, there may be items in the owner's statement that should not be included in the reconstructed operating statement a) Using the NOI and a R. of 9 percent, calculate the property's indicated market value Round your answer to the nearest $1,000 b) Find the indicated value of the property, using the Discounted Cash Flow (DCF) method. Additional information given include: market rent increases 2.3% per year, holding period is 3 years, operating expense is 32% of EGI, reserve for capital expenditure is 5%, terminal cap rate (R) is 9.15% discount rate is 10% and cost of sale is 2.8% B. Income Approach Given the following owner's income and expense estimates for an apartment property, formulate a reconstructed operating statement. The building consists of 10 units that could rent for SS500 per month each. 46,000 Owner's Annual Income Statement Rental income (last year) 5660,000 Less: Operating & capital expenses Power $22.000 Heat 17,000 Janitor Water 37,000 Maintenance 48.000 Reserve for capital expenditures 31.000 Management 30,000 Tax depreciation 50,000 Mortgage payments 63.000 Estimating vacancy and collection losses at 5 percent of potential gross income reconstruct the operating statement to obtain an estimate of NOI. Assume an above-line treatment of CAPX. Remember, there may be items in the owner's statement that should not be included in the reconstructed operating statement a) Using the NOI and a R. of 9 percent, calculate the property's indicated market value Round your answer to the nearest $1,000 b) Find the indicated value of the property, using the Discounted Cash Flow (DCF) method. Additional information given include: market rent increases 2.3% per year, holding period is 3 years, operating expense is 32% of EGI, reserve for capital expenditure is 5%, terminal cap rate (R) is 9.15% discount rate is 10% and cost of sale is 2.8% B