This $$is $$a $$Class $$B $$duplex $$in $$Gainesville $$that $$you $$plan $$to $$renovate $$before $$leasing $$out $$to $$students $$in $$order $$to $$command $$higher $$rents$.$You $$did $$your $$research $$and $$project $$the $$renovations $$to $$cost $$you $$$

$6$

$,$

$5$

$0$

$0$

$$per $$unit $$in $$year $$

$1$

$.$

$$You $$can $$purchase $$the $$property $$for $$$

$1$

$7$

$5$

$,$

$0$

$0$

$0$

$$today $$and $$you $$believe $$that $$the $$total $$combined $$rent $$will $$be $$$

$1$

$,$

$7$

$4$

$5$

$$a $$month $$for $$the $$entire $$property $$with $$a $$

$1$

$2$

$$month $$lease$.$You $$also $$believe $$that $$your $$rent $$will $$grow $$at $$a $$constant $$yearly $$rate $$of $$

$1$

$.$

$5$

$\%$

$$and $$project $$that $$you $$will $$have $$vacancy $$and $$collection $$losses $$of $$

$3$

$\%$

$$annually $$since $$you $$secured $$creditable $$tenants$.$Both $$tenants $$will $$be $$charged $$$

$5$

$0$

$$a $$month $$for $$their $$parking $$spot$,$maintenance $$and $$utilities $$will $$cost $$you $$$

$4$

$,$

$0$

$0$

$0$

$$annually$,$and $$the $$operating $$expenses $$will $$grow $$at $$

$2$

$\%$

$$yearly$.$Based $$on $$your $$assumptions $$you $$can $$sell $$your $$property $$in $$

$5$

$$years $$for $$$

$2$

$2$

$5$

$,$

$0$

$0$

$0$

$.$

$$You $$expect $$there $$to $$be $$selling $$expenses $$of $$

$6$

$\%$

$.$

$$You $$will $$not $$invest $$in $$this $$property $$unless $$you $$can $$realize $$an $$unlevered $$before $$tax $$return $$of $$

$1$

$0$

$\%$

$,$

$$a $$levered $$before $$tax $$return $$of $$

$1$

$4$

$\%$

$,$

$$and $$a $$levered $$after $$tax $$return $$of $$

$9$

$.$

$8$

$\%$

$.$

$$You $$would $$like $$to $$acquire $$the $$property $$with $$

$6$

$0$

$\%$

$$financed $$by $$ABC $$Bank $$with $$a $$

$1$

$5$

$-$

year $$fixed $$interest $$rate $$loan $$at $$

$3$

$.$

$5$

$\%$

$$per $$year$.$You $$also $$negotiate $$to $$only $$pay $$interest $$for $$the $$six $$months$.$You $$will $$have $$to $$pay $$

$3$

$\%$

$$in $$loan $$expenses $$and $$you $$plan $$on $$using $$an $$amortization $$term $$of $$

$3$

$0$

$$years $$making $$this $$a $$fixed $$rate $$partially $$amortized $$loan $$with $$an $$interest $$only $$period$.$Your $$yearly $$taxes $$will $$be $$$

$3$

$,$

$7$

$5$

$0$

$$and $$you $$will $$have $$taxes $$due $$on $$sale $$of $$

$4$

$\%$

$$on $$the $$property$.$Complete $$the $$model$,$and $$provide $$the $$Excel $$formulas $$needed $$to $$fill $$out $$the $$excel $$boxes$.$ It wont let me attach more than one photo this update is confusing.