|
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Reversion
|
Potential Gross Income
|
|
$1,740,000
|
$1,774,800
|
$1,810,296
|
$1,846,502
|
$1,883,432
|
$1,921,101
|
Less: Allowances
|
20%
|
$348,000
|
$354,960
|
$362,059
|
$369,300
|
$376,686
|
$384,220
|
Other income
|
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
Effective Gross Income
|
|
$1,392,000
|
$1,419,840
|
$1,448,237
|
$1,477,202
|
$1,506,746
|
$1,536,880
|
Less: Operating Expenses
|
$556,800
|
$567,936
|
$579,295
|
$590,881
|
$602,698
|
$614,752
|
Net Operating Income
|
|
$835,200
|
$851,904
|
$868,942
|
$886,321
|
$904,047
|
$922,128
|
Terminal Discount Rate
|
|
|
|
|
|
|
12.0%
|
Reversion
|
|
|
|
|
|
|
|
$7,684,402
|
Discount Rate
|
|
14.0%
|
14.0%
|
14.0%
|
14.0%
|
14.0%
|
14.0%
|
Discount Factor
|
|
0.877193
|
0.769468
|
0.674972
|
0.592080
|
0.519369
|
0.519369
|
Present Value of Cash Flows
|
$732,632
|
$655,512
|
$586,511
|
$524,773
|
$469,534
|
$3,991,038
|
Indicated Value of the Property
|
$6,960,000
|
|
|
|
|
|
Sale Price
|
|
|
$6,000,000
|
|
|
|
|
|
Mortgage Position
|
|
80%
|
|
|
|
|
|
Equity Position
|
|
20%
|
|
|
|
|
|
Mortgage Amount
|
|
$4,800,000
|
|
|
|
|
|
Equity Amount
|
|
$1,200,000
|
|
|
|
|
|
Mortgage Rate
|
|
9.0%
|
|
|
|
|
|
Mortgage Term
|
|
15
|
|
|
|
|
|
Mortgage Constant
|
|
0.124059
|
|
|
|
|
|
Debt Service
|
|
$595,483
|
|
|
|
|
|
Equity Dividend
|
|
$239,717
|
|
|
|
|
|
Equity Dividend Rate
|
|
20.0%
|
|
|
|
|
|
Cap Rate
|
|
|
13.9%
|
|
|
|
|
|
Cap Rate - band of investment method
|
13.9%
|
|
|
|
|
|
Debt Coverage Ratio
|
|
1.4
|
|
|
|
|
|
EGI Multiplier
|
|
4.3
|
|
|
|
|
|
Gross income Multiplier
|
3.4
|
|
|
|
|
|
|