Question: What is the ATCF from Reversion (aka how much do you receive from the sale of the property less selling costs and taxes)? Your company




What is the ATCF from Reversion (aka how much do you receive from the sale of the property less selling costs and taxes)?
Your company is considering making an investment in an apartment building You will not use any debt (i.e. a mortgage) to buy the building (i.e. it will be all equity). The Purchase Price is $16,000,000 and Current Assessed Value is $15,750,000 The building has 40 two-bed room apartments and 25 three-bed room apartments. You assume that the monthly rent for two-bed room units is $2,000 and the rent for three-bed room units is $2,750 The building has 75 parking spaces. The charge for each of them is $125 per month. You plan to hold the building for 4 years. The projected information about the investment is as follows. Please construct the pro forma statement (round to dollars) Annual inflation of rents and parking charge Vacancy and collection loss as of PGI Parking Vacancy Allowance Land value as % of the total value Annual growth of assessed value in each of Years 2-5 3.5% 5.0% 4.0% 18% 6.0% Property tax mill rate Other Operating Expenses (% of EGI) Planned holding period Terminal cap rate (applied to 5th year's NOI) Selling cost as a % of Gross Sales Price # of Years for calculating Depreciation 20 35% 4 years 4.50% 2.0% 27.5 Your company is considering making an investment in an apartment building You will not use any debt (i.e. a mortgage) to buy the building (i.e. it will be all equity). The Purchase Price is $16,000,000 and Current Assessed Value is $15,750,000 The building has 40 two-bed room apartments and 25 three-bed room apartments. You assume that the monthly rent for two-bed room units is $2,000 and the rent for three-bed room units is $2,750 The building has 75 parking spaces. The charge for each of them is $125 per month. You plan to hold the building for 4 years. The projected information about the investment is as follows. Please construct the pro forma statement (round to dollars) Annual inflation of rents and parking charge Vacancy and collection loss as of PGI Parking Vacancy Allowance Land value as % of the total value Annual growth of assessed value in each of Years 2-5 3.5% 5.0% 4.0% 18% 6.0% Property tax mill rate Other Operating Expenses (% of EGI) Planned holding period Terminal cap rate (applied to 5th year's NOI) Selling cost as a % of Gross Sales Price # of Years for calculating Depreciation 20 35% 4 years 4.50% 2.0% 27.5
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