You are considering the purchase of an office building for $1.5 million today. Your expectations include the
Question:
You are considering the purchase of an office building for $1.5 million today. Your expectations include the following: first-year potential gross income of $340,000; vacancy and collection losses equal to 15 percent of potential gross income; operating expenses equal to 40 percent of effective gross income and capital expenditures equal 5 percent of EGI. You expect to sell the property five years after it is purchased. You estimate that the market value of the property will increase four percent a year after it is purchased and you expect to incur selling expenses equal to 6 percent of the estimated future selling price. 1. What is estimated effective gross income (EGI) for the first year of operations? 2. What is estimated net operating income (NOI) for the first year of operations? 3. What is the estimated going-in cap rate (Ro) using NOI for the first year of operations?
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1 Item Amount Potential gross income PGI 340000 less VC allowanc...View the full answer
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Alexis Pacheco
When I was in elementary school I had to be tutored in math every summer. I remember having a great experience, feeling prepared, and being ahead of the class once the new school year started. Beginning my college career in a dual program with San Diego State University and Imperial Valley Community College, I saw many of my classmates and friends struggling with subjects and concepts that came easy to me such as: English, Political Science, Art History, Public Administration, resume writing, and professional development. Wanting to provide assistance and help them feel prepared, like my tutor once did for me, I offered to tutor them.
Henceforth, I have tutored classmates, friends, and relatives. In my years of experience I have learned that everyone acquires knowledge in different ways. It is imperative to be flexible and have the ability to adapt to each student's unique learning style. Patience and creativity are also paramount when producing a positive learning environment and attitude.
A couple of reasons why a student would have me teach them is because I am very patient and I understand what it’s like to struggle in school. Having been tutored before and know what it's like to have someone take the time to explain a problem in a way that helps you understand it better. And I know the joy one feels when you finally understand a difficult concept. I love helping people appreciate the criteria they are learning and help them understand why it is important. Everyone learns in a different way and I like to discover the best method that will help that particular student.