You are considering purchasing a Class B multifamily project in a midsized town in Central Texas and

have received the following information about the project: $($Annual Figures unless otherwise noted$)$

Asking Price: $$9,000,000$

Number of Units

$185$

Average Rent per unit:

Current Vacancy

Proforma Vacancy

Misc Income

$$660$

Property Taxes

Repairs and Maintenance

Management, Common Area Utilities, Other Expenses

capeX

The property is approved for a $75\%$ ITV $$250$ per unit

$2$ points at $4\mathrm{.}75\%$ interest rate, with a $5$ year term on a

Reconstructed Operating Statement:

What is the PGI for this property?

What are the proforma V&C losses?

What is the proforma EGI for this property?

What are the operating expenses for this property?

What is the CAPEX for this property?

What is the NOI for this property?

What is the dollar amount of the loan for this property?

What is the annual Debt Service for this Property?

How much Equity is needed to purchase this property?

What is the BTCF for year $1$ for this property?

Valuation:

Given the cap rate on similar projects is $8\mathrm{.}25\%,$ what is the value of this project?

Given the EGIM on similar projects is $6\mathrm{.}5,$ what is the estimated value of this project?

You expect the NOI to grow at $2\mathrm{.}5\%$ each year. The cap rate for this project is estimated at $8\mathrm{.}5\%$ in $5$

years. Selling expenses are estimated at $5\%.$

What is the projected NOI for year $3?$

What is the projected NOI for year $6?$

What is the projected selling price?

What is the projected net selling price?

Given a discount rate of $10\mathrm{.}25\%,$ what is the value of this project $($use DCF approach here$)?$

Ratio Analysis: Compute the following year one ratios for this project.

Cap Rate

Cash on Cash Return $($Equity Dividend Rate$)$

EGIM

Operating Expense RatIo