RE 3010 - Real Estate Principles Assignment #4 Due: Oct 27 (Sun) at 11:59pm on iCollege Show your calculation steps. Answers without the calculation steps will only receive 50% even if correct. Question 1 If a comparable property sells for $1,200,000 and the effective gross income of the property is $12,000 per month, what is the Effective Gross Income Multiplier (EGIM)? Question 2 You have been asked to estimate the market value of an apartment complex that is producing an annual Net Operating Income of $44,500. Four highly similar and competitive apartment properties within two blocks of the subject property have sold recently. All four offer essentially the same amenities and services as the subject. The sale prices and estimated first-year net operating incomes were as follows: Comparable 1: Sale price $500,000; NOI $55,000 Comparable 2: Sale price $420,000; NOI $50,400 Comparable 3: Sale price $475,000; NOI $53,400 Comparable 4: Sale price $600,000; NOI $69,000 What is the indicated value of the subject property using direct capitalization? Question 3 You are given the following information to estimate the value of this office building: Owner's Annual Income Statement 2023 Potential Gross Rent $60,000 Less: Operating & capital expenses Power Heat Janitor Water Maintenance Capital expenditures Management $2,200 1,700 4,600 3,700 4,800 2,800 3,000 Vacancy and collection losses at 5% of potential gross income. a) Calculate the NOI of this property for 2023. b) Using a cap rate of 11%, what is the estimated value of this property using the Direct Capitalization method? c) Estimate the market value of the following small office building using the Discounted Cash Flow method, given the following information: Holding period: 7 years Assuming that NOI grows by 3% per year in the first 4 years, then 2% per year thereafter Terminal cap rate is estimated to be 10% Discount rate: 11%