Question: Need help with excel format for 1.2.3. Problem 5 [20 points] A real estate investor has the following information on an office building: Purchase price
Need help with excel format for 1.2.3.
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Problem 5 [20 points] A real estate investor has the following information on an office building: Purchase price is $1,250,000 with acquisition costs of $60,000 45,000 leasable square feet Initial rent of $10/sq. ft. per year and will increase 1.0 percent per year Vacancy rate of 8% of gross rent per year Operating expenses are 42% of effective gross income . Three financing choices: 1. All equity without any financing; 2. Mortgage with 75% LTV ratio, 15 years, annual payments and 3.5% contract rate; 3. Mortgage with 95% LTV ratio, 15 years, annual payments and 6.0% contract rate; . Expected increase in value is 3.0% per year. Holding period is 15 years, and 5% selling expenses For simplicity, assuming that no capital improvement over the entire holding period 75% depreciable Investor's tax rate is 28%, and capital gain tax rate is 15%
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