MANAGEMENT HOMEWORK NAME: APARTMENT BUILDING WITH 20 UNITS 20.2 BEDROOM UNITS RENT FOR $2,100 PER MONTH 2011 BEDROOM UNITS RENT FOR \$1,500 PER MONTH NO OTHER INCOME VACANCY AND COLLECTION LOSS 2 BEDROOM UNITS AVERAGE 1 UNITS VACANT PER YEAR (10\%) 1 BEDROOM UNITS AVERAGE O UNITS VACANT PER YEAR (10\%) FIXED OPERATING EXPENSES PROPERTY TAXES \$100,000 PER YEAR MANAGEMENTMAINTENCE/GROUNDS$80,000PERYEAR$70,000PERYEAR MAINTENCE/GROUNDSINSURANCE$80,000PERYEAR$10,000PERYEAR VARIABLE COST $300 PER MONTH FOR 2 BEDROOM UNITS TYPICAL INVESTORS BORROW 75% OF THE PURCHASE PRICE (L/M UNITS CURRENTLOANTERMSINVESTORREQUIREDRETURN14%25%DOWNPAYMENT(E/N)7%INTEREST2OYEARTERM 1. CALCULATE NOI 2. OPERATING EXPENSE RATIO 3. CAPITALIZATION RATE 4. EST MARKET VALUE 5. EST MARKET VALUE PER UNIT 6. DEBT SERVICE IS EQUAL TO 7. DEBT COVERAGE RATIO 8. BTCF IS EQUAL TO 9. CASH ON CASH RATE OF RETURN 10.BREAK EVEN POINT IN UNITS