(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).

ASSUME YOU BORROW AT MAXIMUM LTV, BUT YOU MUST MEET THE MIN DCR

D E F G H I 1 INPUTS 2 HOLDING PERIOD 3 UNITS 50 4 MARKET RENT (MONTHLY) PER UNIT $ 800 1% 5 RENT INCREASE PER YEAR 6 INITIAL PURCHASE PRICE $ 2,000,000 7 VACANCY LOSS 4% 8 CREDIT LOSS 1% 9 OPERATING EXPENSE RATIO 40% 10 CAPITAL EXPENDITURES 10% OF EGI 11 GOING OUT CAP RATE 10.00% 12 ORDINARY INCOME TAX 25.00% 13 CAPITAL GAINS TAX RATE 15.00% 12.00% 14 DISCOUNT RATE 15 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 MIN DCR 20 MAX LTV 85% 21 MIN Debt Coverage Ratio (DCR) 80% 1.75 1.40 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% 1.00% 27 $ 2,500 $ 2,500 OTHER NONLENDER FEES UNDERWRITING FEE (Lender) 28 $ 300 29 APPRAISAL $ 300 $ 300 $ 500 $ 300 30 SURVEY $ 500 31 32 33 34 35 MORTGAGE OPTION 1 EBC 36 PV PMT FV 37 38 39 40 41 42 43 44 MORTGAGE OPTION 2 EBC 45 PV PMT FV 46 47 48 49 50 51 52 53 PROFORMA 54 YEAR 1 YEAR 2 YEAR 3 55 PGI 56 -VCL 57 EGI 58 OE 59 CAPX 60 NOI 61 -DS 62 BTCF 63 TAXES (given) (15,000) $ (21,000) $ 64 ATCF 65 66 PURCHASE PRICE 67 68 SP 69 SELLING EXPENSES (6%) 70 NSP 71 OMB A TOTAL CLOSING COSTS LENDER CLOSING COSTS PMT OMB EBC Debt Coverage Ratio Qualify for this mortgage? PMT OMB EBC Debt Coverage Ratio Qualify for this mortgage? B N N 3 YEARS 1 I YEAR 0 $ (27,000) YEAR 4 J 71 OMB 72 BTER 73 TAXES (given) $ 74 ATER 75 76 MARKET NPV 77 MARKET IRR 78 79 BEFORE TAX NPV 80 BEFORE TAX IRR 81 82 AFTER TAX NPV 83 AFTER TAX IRR 84 85 GOING IN CAP RATE 86 DEBT COVERAGE RATIO (EACH YEAR) 87 88 NET EQUITY MULTIPLE 89 90 91 DCF APPROACH TO VALUE 92 APPRAISER HAS ASSUMED A HOLDING PERIOD OF 3 YEARS IS APPROPRIATE 93 APPRAISER HAS ASSUMED A DISCOUNT RATE OF 14.515% IS APPROPRIATE 94 YEAR 0 MARKET VALUE 95 96 DIRECT CAP APPROACH TO VALUE 97 CAP RATE YEAR 2 98 CAP RATE YEAR 3 99 YEAR 2 MARKET VALUE 100 101 102 OTHER MORTGAGE INFO FOR THE HOLDING PERIOD 103 TOTAL PRINCIPAL PAID 104 TOTAL INTEREST PAID 105 LENDER'S YIELD 106 107 108 109 110 111 (31,221) D E F G H I 1 INPUTS 2 HOLDING PERIOD 3 UNITS 50 4 MARKET RENT (MONTHLY) PER UNIT $ 800 1% 5 RENT INCREASE PER YEAR 6 INITIAL PURCHASE PRICE $ 2,000,000 7 VACANCY LOSS 4% 8 CREDIT LOSS 1% 9 OPERATING EXPENSE RATIO 40% 10 CAPITAL EXPENDITURES 10% OF EGI 11 GOING OUT CAP RATE 10.00% 12 ORDINARY INCOME TAX 25.00% 13 CAPITAL GAINS TAX RATE 15.00% 12.00% 14 DISCOUNT RATE 15 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 MIN DCR 20 MAX LTV 85% 21 MIN Debt Coverage Ratio (DCR) 80% 1.75 1.40 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% 1.00% 27 $ 2,500 $ 2,500 OTHER NONLENDER FEES UNDERWRITING FEE (Lender) 28 $ 300 29 APPRAISAL $ 300 $ 300 $ 500 $ 300 30 SURVEY $ 500 31 32 33 34 35 MORTGAGE OPTION 1 EBC 36 PV PMT FV 37 38 39 40 41 42 43 44 MORTGAGE OPTION 2 EBC 45 PV PMT FV 46 47 48 49 50 51 52 53 PROFORMA 54 YEAR 1 YEAR 2 YEAR 3 55 PGI 56 -VCL 57 EGI 58 OE 59 CAPX 60 NOI 61 -DS 62 BTCF 63 TAXES (given) (15,000) $ (21,000) $ 64 ATCF 65 66 PURCHASE PRICE 67 68 SP 69 SELLING EXPENSES (6%) 70 NSP 71 OMB A TOTAL CLOSING COSTS LENDER CLOSING COSTS PMT OMB EBC Debt Coverage Ratio Qualify for this mortgage? PMT OMB EBC Debt Coverage Ratio Qualify for this mortgage? B N N 3 YEARS 1 I YEAR 0 $ (27,000) YEAR 4 J 71 OMB 72 BTER 73 TAXES (given) $ 74 ATER 75 76 MARKET NPV 77 MARKET IRR 78 79 BEFORE TAX NPV 80 BEFORE TAX IRR 81 82 AFTER TAX NPV 83 AFTER TAX IRR 84 85 GOING IN CAP RATE 86 DEBT COVERAGE RATIO (EACH YEAR) 87 88 NET EQUITY MULTIPLE 89 90 91 DCF APPROACH TO VALUE 92 APPRAISER HAS ASSUMED A HOLDING PERIOD OF 3 YEARS IS APPROPRIATE 93 APPRAISER HAS ASSUMED A DISCOUNT RATE OF 14.515% IS APPROPRIATE 94 YEAR 0 MARKET VALUE 95 96 DIRECT CAP APPROACH TO VALUE 97 CAP RATE YEAR 2 98 CAP RATE YEAR 3 99 YEAR 2 MARKET VALUE 100 101 102 OTHER MORTGAGE INFO FOR THE HOLDING PERIOD 103 TOTAL PRINCIPAL PAID 104 TOTAL INTEREST PAID 105 LENDER'S YIELD 106 107 108 109 110 111 (31,221)