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You are considering purchasing a small warehouse for $1,250,000 Your expectations include: First-year gross potential income of $300,000; Vacancy & collection losses equal to 10%
You are considering purchasing a small warehouse for $1,250,000
Your expectations include:
- First-year gross potential income of $300,000;
- Vacancy & collection losses equal to 10% of PGI;
- Operating expenses = 45% of EGI;
- Capital expenditures =3% of EGI (assume "above-line"treatment)
- 70%LTV mortgage @ 7.5%
- Mortgage will be amortized over 30years with monthly payments
- Total up-front financing costs = 2% of the loan amount
Based on the information above,calculate the following ratios:
A.Going-in cap rate
B.EDR
C.EGIM
D.OER
E.DCR
F.DYR
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