The Property's Reconstructed Income and Expense Statement Purchase Price = $2,100,000 Initial Equity = $525,000 Discount Rate = 10% Revelues: 40 Apartments Der Recipe Year 1 28 two bedroom units monthly rent $1,250 $420,000 12 one bedroom units monthly rent $1000 $144,000 Parking Fees: $15 per month for the 2nd car $5,040 $25 per month for covered parking $12,000 Laundry Room Collections $4,500 Potential Gross Income $686,640 less vacancies 10.00% $58,544 Effective Gross Income $526,996 Total Expenses $315,000 Net Operating Income $211,996 Debt Service $136,406 Before Tax Cash Flow $76,591 The Property's Reconstructed Income and Expense Statement Purchase Price = $2,500,000 Initial Equity = $750,000 Discount Rate = 10% Revues: 50 Apartments Pa Rese Year 1 $1,200 $518,400 38 two bedroom units monthly rent 14 one bedroom units monthly rent $950 $159,600 Parking Fees: $15 per month for the 2nd car $6,480 $25 per month for covered parking $15,000 Laundry Room Collections $6,500 Potential Gross Income $705,980 less vacancies 10.00% $70,598 Effective Gross Income $635,382 Total Expenses $375,000 Net Operating Income $260,382 Debt Service $150,451 Before Tax Cash Flow $109,931 Show the ratio answers and answer the questions. (35 points or 5 points each) 1. What are the default ratios? Will the properties make enough to at least break-even? 2. What are our annual returns? Do these project's cap rates meet our requirements for investment? 3. What is our EDR for each investment and is it higher than the cap rate? 4. On the same note, what are the Mortgage Constants and are they lower than the cap rate? 5. What is the DCR for each? Would a bank consider their debt coverage ratio's satisfactory? 6. What are the OERs and which of the two would an investor prefer if the prices and down- payments were the same? 6. What are the OERs and which of the two would an investor prefer if the prices and down- payments were the same? 7. Which of the two investments would we rather own? And give one reason why? The Property's Reconstructed Income and Expense Statement Purchase Price = $2,100,000 Initial Equity = $525,000 Discount Rate = 10% Revelues: 40 Apartments Der Recipe Year 1 28 two bedroom units monthly rent $1,250 $420,000 12 one bedroom units monthly rent $1000 $144,000 Parking Fees: $15 per month for the 2nd car $5,040 $25 per month for covered parking $12,000 Laundry Room Collections $4,500 Potential Gross Income $686,640 less vacancies 10.00% $58,544 Effective Gross Income $526,996 Total Expenses $315,000 Net Operating Income $211,996 Debt Service $136,406 Before Tax Cash Flow $76,591 The Property's Reconstructed Income and Expense Statement Purchase Price = $2,500,000 Initial Equity = $750,000 Discount Rate = 10% Revues: 50 Apartments Pa Rese Year 1 $1,200 $518,400 38 two bedroom units monthly rent 14 one bedroom units monthly rent $950 $159,600 Parking Fees: $15 per month for the 2nd car $6,480 $25 per month for covered parking $15,000 Laundry Room Collections $6,500 Potential Gross Income $705,980 less vacancies 10.00% $70,598 Effective Gross Income $635,382 Total Expenses $375,000 Net Operating Income $260,382 Debt Service $150,451 Before Tax Cash Flow $109,931 Show the ratio answers and answer the questions. (35 points or 5 points each) 1. What are the default ratios? Will the properties make enough to at least break-even? 2. What are our annual returns? Do these project's cap rates meet our requirements for investment? 3. What is our EDR for each investment and is it higher than the cap rate? 4. On the same note, what are the Mortgage Constants and are they lower than the cap rate? 5. What is the DCR for each? Would a bank consider their debt coverage ratio's satisfactory? 6. What are the OERs and which of the two would an investor prefer if the prices and down- payments were the same? 6. What are the OERs and which of the two would an investor prefer if the prices and down- payments were the same? 7. Which of the two investments would we rather own? And give one reason why