Question
Residential Apartment Building 138 units Apartment BreakdownMonthly Rent (36) Studios$750.00 (48) 1 Bedrooms1,500.00 (42) 2 Bedrooms2,200.00 (12) 3 Bedrooms2,700.00 Closing Costs:2.5% of Purchase Price Vacancy:3%
Residential Apartment Building
138 units
Apartment BreakdownMonthly Rent
(36) Studios$750.00
(48) 1 Bedrooms1,500.00
(42) 2 Bedrooms2,200.00
(12) 3 Bedrooms2,700.00
Closing Costs:2.5% of Purchase Price
Vacancy:3% of Gross Potential Rent
Loan Constant:6.5% (Based on a 30-year amortization)
Ordinary Income Tax Rate:28%
Capital Improvements:$ 213,000
Real Estate Taxes187,000
Insurance73,000
Annual Debt Service1,337,213
Payroll and Payroll Taxes185,000
Union Benefits37,500
Utilities78,000
Repairs150,000
Supplies30,000
Legal and Accounting25,000
1. What is the Mortgage amount?
2. How much equity is invested in the property?
3. What is the LTV?
4. What is the cash-on-cash return (after debt service) on this investment?
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Financial Accounting Information For Decisions
Authors: John J. Wild
10th Edition
1260705587, 978-1260705584
