You are an investor looking to acquire a $150$ unit apartment in Gainesville, FL$.$ It is a Class B property with no major

damages. You can purchase the property for $$10,750,000$ today and you charge $$850$ a month for each unit on a $12$

month lease. You also believe that your rent will grow at a constant yearly rate of $1\mathrm{.}5\%$ and project that you will have

vacancy and collection losses of $5\%$ annually since you account for some tenants not paying their rent on time even

though you have $100\%$ occupancy. You assume $60\%$ of your tenants will need parking so you charge $$75$ a month

for their parking spot. Every year maintenance and utilities will cost you $$250,000$ and it will grow at $2\mathrm{.}5\%$ yearly.

You think that based on your market projections, you can sell your property in $5$ years for $$11,250,000$ and you

expect there to be selling expenses of $6\%.$ You will not invest in this property unless you can realize an unlevered

before tax return of $10\%,$ a $14\%$ levered return before taxes, and a $9\mathrm{.}8\%$ levered return after taxes on the property.

Furthermore, you successfully acquired the property with $60\%$ financed by ABC Bank with a $15-$year fixed interest

rate loan at $4\mathrm{.}25\%$ per year. You will have to pay $3\%$ in loan expenses and you plan on using an amortization term of

$15$ years making this a fixed interest rate fully amortized loan. You will have yearly taxes of $$115,000$ for the next $5$

years and you will have taxes due on sale of $4\%$ on the property. Once you complete the model, answer theIn order to lease the building, you can only charge $($$$775/$unit$)$ a month in rent. By what percentage does this drop your "Unlevered Before Tax" IRR?