Question 26 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 1 $268.575 $278.610 $276607 $282.721