B C . 1 INPUTS 2 HOLDING PERIOD 3 UNITS 4 MARKET RENT (MONTHLY) PER UNIT 5 RENT INCREASE PER YEAR 6 INITIAL PURCHASE PRICE 7 VACANCY LOSS 8 CREDIT LOSS 9 OPERATING EXPENSE RATIO 10 CAPITAL EXPENDITURES 11 GOING OUT CAP RATE 12 ORDINARY INCOME TAX 13 CAPITAL GAINS TAX RATE 14 DISCOUNT RATE 15 3 YEARS 50 800 1% 2,000,000 4% 1% 40% 10% OF EGI 10.00% 25.00% 15.00% 12.00% 75 16 17 (Note: Compute the payment using both options to see which mortgage the subject property qualifies for. If it qualifies for both choose the mortgage with the lowest EBC) 18 MORTGAGE OPTION 1: MORTGAGE OPTION 2: 19 ASSUME YOU BORROW AT MAXIMUM LTV BUT YOU MUST MEET THE MINDCR 20 MAX LTV 85% 80% 21 MIN Debt Coverage Ratio (DCR) 1.40 1.75 22 TERM (YEARS) 15 15 23 AMORTIZATION (YEARS) 30 15 24 INTEREST RATE 7.00% 6 50% 25 CLOSING COSTS 26 ORIGINATION FEE (Lender) 1.00% 100% 27 OTHER NONLENDER FEES $ 2.500 5 2,500 28 UNDERWRITING FEE (Lender) $ 300 300 25 APPRAISAL $ 300S 300 30 SURVEY $ 500 $ 31 TOTAL CLOSING COSTS 32 LENDER CLOSING COSTS 33 500