|
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Year 6
|
Potential Gross Income
|
$3,540,000
|
$3,610,800
|
$3,683,016
|
$3,756,676
|
$3,831,810
|
$3,908,446
|
Less: Allowances @10%
|
$354,000
|
$361,080
|
$368,302
|
$375,668
|
$383,181
|
$390,845
|
Other income
|
$48,000
|
$48,960
|
$49,939
|
$50,938
|
$51,957
|
$52,996
|
Effective Gross Income
|
$3,234,000
|
$3,298,680
|
$3,364,654
|
$3,431,947
|
$3,500,586
|
$3,570,597
|
Less: Operating Expenses
|
$1,131,900
|
$1,154,538
|
$1,177,629
|
$1,201,181
|
$1,225,205
|
$1,249,709
|
Net Operating Income
|
$2,102,100
|
$2,144,142
|
$2,187,025
|
$2,230,765
|
$2,275,381
|
$2,320,888
|
Terminal Discount Rate
|
|
|
|
|
|
12.0%
|
Reversion
|
|
|
|
|
|
$19,340,735
|
Discount Rate
|
12.0%
|
12.0%
|
12.0%
|
12.0%
|
12.0%
|
12.0%
|
Discount Factor
|
0.892857
|
0.797194
|
0.711780
|
0.635518
|
0.567427
|
0.567427
|
Present Value of Cash Flows
|
$1,876,875
|
$1,709,297
|
$1,556,681
|
$1,417,692
|
$1,291,112
|
$10,974,453
|
Indicated Value of the Property
|
$18,826,109
|
|
|
|
|
|
Sale Price
|
$17,000,000
|
|
|
|
|
|
Mortgage Position
|
70%
|
|
|
|
|
|
Equity Position
|
30%
|
|
|
|
|
|
Mortgage Amount
|
$11,900,000
|
|
|
|
|
|
Equity Amount
|
$5,100,000
|
|
|
|
|
|
Mortgage Rate
|
9.0%
|
|
|
|
|
|
Mortgage Term
|
20
|
|
|
|
|
|
Mortgage Constant
|
0.109546
|
|
|
|
|
|
Debt Service
|
$1,303,603
|
|
|
|
|
|
Equity Dividend
|
$798,497
|
|
|
|
|
|
Equity Dividend Rate
|
15.7%
|
|
|
|
|
|
Cap Rate
|
12.4%
|
|
|
|
|
|
Cap Rate - band of investment method
|
12.4%
|
|
|
|
|
|
Debt Coverage Ratio
|
1.6
|
|
|
|
|
|
EGI Multiplier
|
5.3
|
|
|
|
|
|
Gross income Multiplier
|
4.8
|
|
|
|
|
|
|