You are a real estate investor that has an interest in purchasing a multifamily property in Atlanta, Georgia. You received the offering brochure and you discovered that this is a 53 unit apartment complex near the Vine City MARTA station. In using your analytical skills, including your ability to analyze this market, perform a Before Tax/No Financing Analysis on this apartment complex. The market information is as follows: 26. Rents are $625 per month and will increase at a rate of 3% per year. 27. Vacancy rates are 5% 28. There is laundry income in year 1 in the amount of $1,200 and will continue to increase at a rate of 2% per year. 29. Operating expenses are estimated to be approximately 43% of collected income. 30. Sales price should be calculated using Year 6 NOI capped at 7% 31. Cost of sale is 6% Using the worksheet on the below conduct a Before Tax/ No Financing Analysis and answer the following questions: 42. What is the before tax cash flow at the end of year 3? 43. What is the Levered IRR for this project? 44. Based upon your required return of 10%, would you make this investment and why? D E F CASH FLOW ANALYSIS POTENTIAL RENTAL INCOME YEAR 1 YEAR 2 YEAR 3 397500409425 421707. 8 YEAR 4 YEAR 5 YEAR 6 434359 447389.8 4608114 VACANCY AND CREDIT LOSSES 19875 20471.25 21085.39 21717.95 22369.49 23040.57 EFFECTIVE RENTAL INCOME 377625 388953.8) 400622. 4 412641 425020.3 437770.9 10 OTHER INCOME 1200 1224 1248.48 1273.4 1298.919 1324.897 378825 390177.8 401870.8 413914.5 426319.2 439095.8 12 GROSS OPERATING INCOME 13 14 OPERATING EXPENSES 159106.5 163874.7 168785.8 173844.1 179054.1 184420.2 16 NET OPERATING INCOME 219718.5 226303.1 233085.1 240070.4 247265.1 254675.5