Purchase price $600,000 LTV Term & Am Interest rate 78% 15 years Closing costs Holding period Annual income taxes Marginal tax rate (ordinary inc tax) Taxes due on sale 4% $9,360 5 years $5,000 fixed each year 30% $100,000 Discount rate (before tax) 15% Selling expenses Exit cap rate NOI CAPEX 3% 5% YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 $35,400 $40,350 $ 42,450 $46,830 $52,200 $42,954 $(5,000) $(7,000) $ (8,000) $ (4,000) $ (9,000) PBTCF $ 30,400 $ 33,350 $ 34,450 $42,830 $ 43,200