The Property's Reconstructed Income and Purchase Price = $2,100,000 Expense Statement Initial Equity = $525,000 Discount Rate = 10% Revelues: 40 Apartments Year 1 28 two bedroom unts @mortenly rent 12 one bedroom unts monthly rent $1,250 $420,000 $1000 $144,000 Parking Fees e per month for the 2nd car $25 per month for covered parking $5,040 $12,000 Laundry Room Collections $4,500 Potential Gross Income Jess vacancies Effective Gross Income 10.00% $585,540 $58,544 $526,996 Total Expenses $315,000 Net Operating Income $211,996 Debt Service $135,405 Before Tax Cash Flow $76,691 The Property's Reconstructed Income and Purchase Price = $2,500,000 Expense Statement Initial Equity = $750,000 Discount Rate = 10% Revenues: 50 Apartments Year 1 36 two bedroom unts monthly rent 14 one bedroom units monthly rent $1,200 $518,400 $950 $159,600 Parking Fees $15 per month for the 2nd car $25 per month for covered parking $6,480 $15,000 Laundry Room Collections $6,500 Potential Gross Income les vacancies Ellective Gross Income 10.00% $705,980 $70,698 $636,382 Total Expenses $375,000 Net Operating Income $260,382 Debt Service $150,451 Before Tax Cash Flow $109,931 Ratio Questions 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? I 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? a 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 investrlents would we rather own? And give one reason why