REAL ESTATE FINANCE Sample Problems (Show detailed solution) 1. A real estate investor bought 10 hectares of raw agricultural land for Php60,000,000. If the value of raw agricultural land will normally increase by 6% per year and inflation is estimated to be at 2% for the next four years, what will be the projected value of the land at the end of the fourth year taking into consideration inflation? 2. A 100-unit apartment complex includes 60 one-bedroom and 40 two-bedroom units that are rented out for Php4,000.00 and Php7,000.00 respectively. The apartment complex has vacancy rate of 5%, a miscellaneous income Php50,000.00 per year and an annual operating expense of Php600,000.00. Compute the potential gross income of the apartment complex. 3. What is the debt service coverage ratio (DSCR) of a commercial real estate investment if the net operating income is Php 8,000,000.00 and the total debt service per year is Php5,000,000.00? 4. In order to buy a commercial building, it requires an equity investment of Php 20,000,000.00. Annual cash flow is expected to be Php 2,000,000.00. Compute the payback period