The following is a 7-year forecast of net operating income (Year 0 and 1 may not add up, but this is what I was given to complete the assignment):

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1. Based on the NOI projection for the first year, estimate the mortage loan that will be available if the lender requires a debt coverage ratio of no less than 1.20. Anticipated loan terms are interest at 8.5% per annum, and level monthly payments to amortize the loan over 20 years. No discount points or loan origination fee is anticipated.

2. Round your mortgage loan estimate from Question #1 above to the nearest $100,000. Modify the projection to derive a 7-year projection of before-tax cash flow based on this loan.

3. Using the projection you made from Question #2 above, develop a 7-year amortization schedule that includes an anticipated remaining mortgage balance at the end of 7 years.

4. Using the forecasted future market value develop in Question #3 above (roundest to the nearest $100,000), estimate before-tax cash flow from disposal, assuming the following:

a) The property is sold at the end of the seventh year (before the first debt service payment falls due for the eigth year)

b) Transaction costs (brokerage, legal and accounting fees, and so forth) equal 8% of the selling price.

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C. 12 2 # of units 3 rent 4 GPI 5 vacancies/loss 15,750.00$ 15,750.0 6 free rent 7 other income$10,000.00 10,000.00 8 EGI 9 less operating exp 30 30 30 30 30 30 30 30 875.00$ 875.00$$919.30$942.28 965.84$ 989.98 1,014.73 315,000.00 $ 315,000.00$ 322,875.00$ 330,946.88 $ 339,220.55 $347,701.06 $356,393.59 $365,303.43 16,143.75 $ 16,547.34 16,961.03 $ 17,385.05$17,819.68 $ 18,265.17 11,879.79 12,176.78 10,250.00 10,506.25 $ 10,768.91 11,038.13 11,314.08 11,596.93 $278,750.00 306,219.00$ 313,874.00 321,721.00 $ 329,764.00$ 38,008.00 $346,458.00 $355,120.00 10,500.00 10,500.00$ 10,762.50 11,031.56 11,307.35 11,590.04 10 management fee $ 14,938.00 $ 15,311.45$ 15,694.24 $ 16,086.59$ 16,488.76$ 16,900.98 $ 17,323.50 $ 17,756.59 11 resident manager 10,000.00 $ 10,250.00 10,506.25 $ 10,768.91 11,038.13 $ 11,314.08 11,596.93 $ 11,886.86 12 utilities ,,,,,,, $ 1,140.00$ 1,168.50$ 1,197.71$ 1,227.66$ 1,258.35$ 1,289.81$ 1,322.05$ 1,355.10 13 property insurance 11,700.00 11,992.50 12,292.31 12,599.62$ 12,914.61 S 13,237.48 $ 13,568.41 $ 13,907.62 4 worker's comp $ 140.00S 143.50 s 147.09s 150.76 154.53S 158.40s 162.36 166.42 15 grounds care 16 misc. 7 maintenance staff $ 7,800.00$ 7,995.00$ 8,194.88 8,399.75 $ 8,609.74 $ 8,824.98 $ 9,045.61 $ 9,271.75 18 property tax 9 total expenses $119,165.00 $120,359.13 $ 121,583.10 $127,485.68 $ 128,771.62 $130,089.71 $131,440.76 $141,816.58 20 NOI 1,300.001,332.50 1,365.81 1,399.96 $ 1,434.96$ 1,470.83 $ 1,507.60 1,545.29 71,400.00$ 71,400.00$ 71,400.00$ 76,048.00$ 76,048.00 $ 76,048.00$ 76,048.00 $ 85,039.00 $179,586.00 $185,860.00 192,292.00$ 194,236.00 200,993.00 $207,919.00 $ 215,018.00 $213,304.00 C. 12 2 # of units 3 rent 4 GPI 5 vacancies/loss 15,750.00$ 15,750.0 6 free rent 7 other income$10,000.00 10,000.00 8 EGI 9 less operating exp 30 30 30 30 30 30 30 30 875.00$ 875.00$$919.30$942.28 965.84$ 989.98 1,014.73 315,000.00 $ 315,000.00$ 322,875.00$ 330,946.88 $ 339,220.55 $347,701.06 $356,393.59 $365,303.43 16,143.75 $ 16,547.34 16,961.03 $ 17,385.05$17,819.68 $ 18,265.17 11,879.79 12,176.78 10,250.00 10,506.25 $ 10,768.91 11,038.13 11,314.08 11,596.93 $278,750.00 306,219.00$ 313,874.00 321,721.00 $ 329,764.00$ 38,008.00 $346,458.00 $355,120.00 10,500.00 10,500.00$ 10,762.50 11,031.56 11,307.35 11,590.04 10 management fee $ 14,938.00 $ 15,311.45$ 15,694.24 $ 16,086.59$ 16,488.76$ 16,900.98 $ 17,323.50 $ 17,756.59 11 resident manager 10,000.00 $ 10,250.00 10,506.25 $ 10,768.91 11,038.13 $ 11,314.08 11,596.93 $ 11,886.86 12 utilities ,,,,,,, $ 1,140.00$ 1,168.50$ 1,197.71$ 1,227.66$ 1,258.35$ 1,289.81$ 1,322.05$ 1,355.10 13 property insurance 11,700.00 11,992.50 12,292.31 12,599.62$ 12,914.61 S 13,237.48 $ 13,568.41 $ 13,907.62 4 worker's comp $ 140.00S 143.50 s 147.09s 150.76 154.53S 158.40s 162.36 166.42 15 grounds care 16 misc. 7 maintenance staff $ 7,800.00$ 7,995.00$ 8,194.88 8,399.75 $ 8,609.74 $ 8,824.98 $ 9,045.61 $ 9,271.75 18 property tax 9 total expenses $119,165.00 $120,359.13 $ 121,583.10 $127,485.68 $ 128,771.62 $130,089.71 $131,440.76 $141,816.58 20 NOI 1,300.001,332.50 1,365.81 1,399.96 $ 1,434.96$ 1,470.83 $ 1,507.60 1,545.29 71,400.00$ 71,400.00$ 71,400.00$ 76,048.00$ 76,048.00 $ 76,048.00$ 76,048.00 $ 85,039.00 $179,586.00 $185,860.00 192,292.00$ 194,236.00 200,993.00 $207,919.00 $ 215,018.00 $213,304.00