Use the following assumptions below to answer the following questions.

Asking Price: $249,500

Total Sq. Ft.: 2,028

Total Units: 2

Avg. Monthly Rent per Unit: $1,625

Annual Rent Growth: 3.0%

Renovation Cost ($/SF): $70.00

Vacancy Allowance: 6.5% of Potential Gross Rent

Expense Ratio: 25.0% of Effective Gross Rent

Loan to Cost: 80% of Total Project Cost (acquisition + renovation)

Interest Rate: 7.0% (paid monthly)

Amortization Period: 30 years

Holding Period: 5 years

Terminal Cap Rate: 7.0% (on forward 12-month NOI ie. NOI in Year 6)

Sales Expense: 6.0% on year five sale price

1. What is the total renovation cost? (round to the nearest dollar)

2. What is the total loan amount? (round to the nearest dollar) Hint: Loan-to-Cost x (Asking Price + Renovation Cost)

3. How much equity will be needed to complete this project? (round to the nearest dollar) Hint: Total Project Cost - Loan Amount = Required Equity

4. What is the annual debt service? (round to the nearest dollar) Hint: Make sure you are calculating your annual debt service and not your monthly debt service

5. What is the projected Net Operating Income in year 5? (round to the nearest dollar)

6. What is the projected sale price in year 5? (round to the nearest dollar) Hint: Take year 6 NOI and divide by the terminal cap rate to determine year 5 sales price

7. What is the loan's principal balance when you sell at the end of year five? Hint: It is possible to build out an amortization schedule or use the FV Function in Excel (much quicker)

Group of answer choices:

A. $313,168

B. $315,206

C. $294,790

D. $311,115

8. What is the projected levered cash-on-cash return in year 4?

Group of answer choices:

A. 7.4%

B. 7.6%

C. 6.2%

D. 5.1%

9. What is the projected unlevered IRR?

Group of answer choices:

A. 9.9%

B. 8.8%

C. 12.1%

D. 14.9%

10. What is the levered equity multiple on this project?

Group of answer choices:

A. 1.93x

B. 2.98x

C. 1.46x

D. 1.49x