REAL ESTATE HW #3 .You are considering purchasing a small office building for Q1. Calculate Going-in Cap Rate (Ro): 340,000 51,000 $1,975,000 Your expectations include 289,000 115,600 14,450 158,950 125,630 33,320 First-year gross potential income of $340,000; -Vacancy & collection losses equal to 15% of PGI; -Operating expenses-40% of EGI; -Capital expenditures-5% of EGI -$1,481.250 mortgage (7S% LTV) @ 7% - Mortgage will be amortized ower 25 years with a monthly OE CAPEX NOI Q2. Calculate the Equity Dividend Ratio (EDR): payment of $10,469.17 -Total up-front financing costs = 256 of the loan amount - Required equity inwestment is $523,375 1$1,975,000- BTCF ($1,481,250- $29,625) Complete Q1 - 05 using info above Q3. Calculate the Effective Gross Income Multiplier (EGIM): HW #3 You are considering purchasing a small office building for $1,975,000 Q4. Calculate the Operating Expense Ratio (OER): Your expectations include: -First-year gross potential income of $340,000 -vacancy & collection losses equal to 1S% of PGI; -Operating expenses 40% of EGI -Capital expenditures-S% of EGI -$1.481,250 mortgage (75% LT) @ 7% - Mortgage will be amortized over 25 years with a monthly payment of $10,469.17 -Total up-front financing costs = 2% of the loan amount - Required equity inwestment is $523,375 I$1,975,000- Q5. Calculate the Debt Coverage Ratio (DCR) ($1,431,250-$29,625)1