A real estate investor has the following information on a warehouse: Purchase price is $1.125.000, 33,600 leasable square feet. Initial rent of $20/sq. ft. per year and will increase 3 percent per year, Vacancy rate of 5% of gross rent per year, Operating Expenses are 40% of Effective Gross income, and Capital expendtures are $12.000 first year and will grow at 3% per year. Mortgage is 75% LTV ratio, 20 years term and 9% contract mortgage rate. Assuming that you will sell the property and there is 6% selling cost at the end of year 2. Expected Selling Warehouse price grows at the end of year 2 is NOI of year 3 capitalized at 8%. Compute equity before-tax cash flows in year 2 5538.610 3568.575 $646.354 3616,637 Previous Next A real estate investor has the following information on a warehouse: Purchase price is $1.125.000, 33,600 leasable square feet. Initial rent of $20/sq. ft. per year and will increase 3 percent per year, Vacancy rate of 5% of gross rent per year, Operating Expenses are 40% of Effective Gross income, and Capital expendtures are $12.000 first year and will grow at 3% per year. Mortgage is 75% LTV ratio, 20 years term and 9% contract mortgage rate. Assuming that you will sell the property and there is 6% selling cost at the end of year 2. Expected Selling Warehouse price grows at the end of year 2 is NOI of year 3 capitalized at 8%. Compute equity before-tax cash flows in year 2 5538.610 3568.575 $646.354 3616,637 Previous Next