Given the following owner's income and expense estimates for an apartment property, formulate a reconstructed operating statement. The building consists of 10 units that could rent for $550 per month each.

Estimating vacancy and collection losses at 5 percent of potential gross income, reconstruct the operating statement to obtain an estimate of NOI. Remember, there may be items in the owner's statement that should not be included in the reconstructed operating statement. Using the NOI and a Ro of 11.0 percent, calculate the property's indicated market value. Round your answer to the nearest $500.

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Owner's Income Statement Rental income (last year) Less: Expenses S60,600 Power Heat Janitor Water Maintenance $2,200 1,700 4.600 3.700 j 4,800 Reserves for replacement |2.800 3,000 5,000 agement Depreciation Mortgage payments 6,300 34,100 S26,500 Net income