Property Assumptions Purchase price $27,500,000 Acquisition costs $1,000,000 Property Type Multi Family Year one potential rental income $3,505,512 Annual PGI growth rate 1 75 percent Vacancy and credit losses 5 25 percent of rental income ONLY Other income $12,200 Other income annual growth rate 1 25 percent Operating expenses 45 of EGI Land improvement allocation Land 20 percent Improvements 80 percent Disposition price capitalize sixth year NOI at 5 50 percent to determine EOY five disposition price Disposition cost of sale 6 percent Purchase in January and sell in December of respective years Financing Assumptions Loan amount the loan will be the lesser of the amounts calculated using LTV ratio and DSCR Maximum LTV ratio 70 percent Minimum DSCR 1 30 Interest rate 4 25 percent Amortization period 20 years Loan term 7 years Payments per year 12 Loan costs Lenders discount points 1 2 percent of loan amount Third party cost $75,000 Investor Assumptions Anticipated holding period 5 years Investors tax rates Ordinary income 37 percent Capital gain from cost recovery taken 25 percent Capital gain from appreciation 20 percent Weighted Cost of Capital 11 Provide a full financial model and analysis with Levered and Unlevered NPV, and IRR for Before, Levered After Tax of the same and Cash on Cash for Before Tax Levered and Unlevered (No need to provided unlevered After Tax NPV, IRR or Cash on Cash) Then state if this is a financially wise investment

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Posted on Jul 13, 2024

Property Assumptions: Purchase price: $27,500,000 Acquisition costs: $1,000,000 Property Type: Multi-Family Year one potential rental income: $3,505,512 Annual PGI growth rate: 1.75 percent Vacancy and

Property Assumptions:

Purchase price: $27,500,000
Acquisition costs: $1,000,000
Property Type: Multi-Family
Year one potential rental income: $3,505,512
Annual PGI growth rate: 1.75 percent
Vacancy and credit losses: 5.25 percent of rental income ONLY
Other income: $12,200
Other income annual growth rate: 1.25 percent
Operating expenses: 45% of EGI
Land/improvement allocation:
- Land: 20 percent
- Improvements: 80 percent
Disposition price: capitalize sixth year NOI at 5.50 percent to determine EOY five disposition price
Disposition cost of sale: 6 percent
Purchase in January and sell in December of respective years.

Financing Assumptions:

Loan amount: the loan will be the lesser of the amounts calculated using LTV ratio and DSCR
Maximum LTV ratio: 70 percent
Minimum DSCR: 1.30
Interest rate: 4.25 percent
Amortization period: 20 years
Loan term: 7 years
Payments per year: 12
Loan costs
- Lenders discount points: 1.2 percent of loan amount
- Third party cost: $75,000

Investor Assumptions:

Anticipated holding period: 5 years
- Investors tax rates
- Ordinary income: 37 percent
- Capital gain from cost recovery taken: 25 percent
- Capital gain from appreciation:20 percent
- Weighted Cost of Capital: 11%

Provide a full financial model and analysis with Levered and Unlevered NPV, and IRR for Before, Levered After Tax of the same and Cash on Cash for Before Tax Levered and Unlevered (No need to provided unlevered After Tax NPV, IRR or Cash on Cash). Then state if this is a financially wise investment.