Understanding Cap Rates, Sale Price, and Unleveraged Cash Flows.

You wrap up the first part of your Stage 2: Discounted Cash Flow Analysis on a Mixed-Use Retail and Office Building assuming a three-year holding period below: Year Year Year Year Year 0 1 2 3 4 Cash Flow from Operations Gross Potential Rents 590,000 $ $ 650,000 Less Vacancy EA 560,000 $ 620,000 (36,000) (38,000) $ (40,000) $ (44,000) Effective Gross Rents S 524,000 S 552,000 580,000 606,000 Total Operating Expenses $ (198,000) $ (210,000) $ (215,000) $ (222,000) Net Operating Income 326,000 $ 342,000 $ 365,000 $ 384,000 The asking price is $3.7 million