You decide to form an entity to invest in Real Estate. You call the LLC Jefferson's Investment. You find an attractive investment in a 300,000 Sf commercial building with a purchase price of $50,000,000. In order to fund this property, you find 10 partners whos willing to contribute $2,000,000 each. You put down $1,000,000 for working capital for the property and borrow the remaining $30,000,000 at 5% amortized over 30 years and the mortgage is paid monthly. (Note: The funds raised for an investment is above the purchase price as you need working capital to operate the business). The deal closes on 12/31/2018 and your accountant attributes 30% of the investment value to land and the remaining to the building. The building depreciates over 39 years.

The tenants are spread evenly. Meaning there are 3 tenants, each occupying 100,000 Sf. Each tenant pays rent of $20 Sf/Yr (Note: The tenants were in the property before you assumed control so there were no leasing commissions or concessions). Rents are paid monthly. Costs are as follow: Property taxes are 2% of the Fair Market Value (building was assessed at $50,000,000) when you bought it. Taxes are paid twice a year at the end of March and September and it is for the following 6 months (Note: the previous landlord paid for the property taxes for Jan 2019-March 2019, and is reimbursed by the purchase price of the property, this assumption is valid for all of the costs)~(Also Note: this will generate a prepaid expense). Insurance costs are $1.00 Sf/Yr paid at the end of the year. Common area utilities are $1.50 Sf/Yr. Repairs and Maintenance is $0.75 SF/Yr. All of the costs are first paid for by the landlord but reimbursed by the tenant (assume 100% reimbursement and no bad collection). There is also a management fee equal to 2% of total revenue.

In July of 2019, there were leaks in the roof. As a result, you re-did the roof for $300,000. It was completed at the end of July, and your accounting deemed it as a capital improvement lasting for 7 years. The parking lot was getting weary so you re-pave it for $500,000 at the end of September 2019 and it was deemed as a capital improvement lasting for 7 years. Recall that the depreciation for the 1^st year on these improvements will be for a part of the year.

Make a Balance sheet for 1/1/2019. Then make an Income Statement (for period of 2019, then a Cash flow Statement (2019), and a Balance sheet (ending 2019). Taxes are 21%. (Note: These are GAAP statements not Finance modeling statements).