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You are working with a client who would like to build an 8 0 - unit apartment complex that includes 5 0 one - bedroom
You are working with a client who would like to build an unit apartment complex that includes onebedroom apartments and twobedroom apartments. The client has $ mathrmMM of his own money but would need to secure a loan from a bank for the remainder of the funds needed. What would the client need to charge as monthly rent for both onebedroom and twobedroom apartments to have a return of per year, compounded annually after years?
CONSTRUCTION COSTS:
Land purchase:
$MM
Site preparation:
$ mathrmMM
Utilities:
$ mathrmMM
Site preparation, landscaping, parking lots, common areas, etc.: $ mathrmMM
Construction costs: $ square foot Each bedrm sqftbedrm mathrmsqmathrmft
Engineering costs: of the total construction cost less the land purchase
FINANCING COSTS:
Bank loan:
Remainder of the construction costs at
Community incentive: $ mathrm~K
ANNUAL COSTS:
Operational & Maintenance costs: of initial capitalized costs less the land purchase
Property taxes: of book value
Depreciation straight line over years.
Occupancy rate of first year and thereafter both types of units
FINAL RESULT:
Market value at the end of years: of initial cost
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