|
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Reversion
|
Potential Gross Income
|
$3,700,000
|
$3,811,000
|
$3,925,330
|
$4,043,090
|
$4,164,383
|
$4,289,314
|
Less: Allowances @15%
|
$555,000
|
$571,650
|
$588,800
|
$606,463
|
$624,657
|
$643,397
|
Other income
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
Effective Gross Income
|
$3,145,000
|
$3,239,350
|
$3,336,531
|
$3,436,626
|
$3,539,725
|
$3,645,917
|
Less: Operating Expenses
|
$1,258,000
|
$1,295,740
|
$1,334,612
|
$1,374,651
|
$1,415,890
|
$1,458,367
|
Net Operating Income
|
$1,887,000
|
$1,943,610
|
$2,001,918
|
$2,061,976
|
$2,123,835
|
$2,187,550
|
Terminal Discount Rate
|
|
|
|
|
|
14.0%
|
Reversion
|
|
|
|
|
|
$15,625,358
|
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
|
$1,684,821
|
$1,549,434
|
$1,424,926
|
$1,310,423
|
$1,205,121
|
$8,866,248
|
Indicated Value of the Property
|
$16,040,973
|
|
|
|
|
|
Sale Price
|
$15,000,000
|
|
|
|
|
|
Mortgage Position
|
80%
|
|
|
|
|
|
Equity Position
|
20%
|
|
|
|
|
|
Mortgage Amount
|
$12,000,000
|
|
|
|
|
|
Equity Amount
|
$3,000,000
|
|
|
|
|
|
Mortgage Rate
|
9.0%
|
|
|
|
|
|
Mortgage Term
|
15
|
|
|
|
|
|
Mortgage Constant
|
0.124059
|
|
|
|
|
|
Debt Service
|
$1,488,707
|
|
|
|
|
|
Equity Dividend
|
$398,293
|
|
|
|
|
|
Equity Dividend Rate
|
13.3%
|
|
|
|
|
|
Cap Rate
|
12.6%
|
|
|
|
|
|
Cap Rate - band of investment method
|
12.6%
|
|
|
|
|
|
Debt Coverage Ratio
|
1.3
|
|
|
|
|
|
EGI Multiplier
|
4.8
|
|
|
|
|
|
Gross income Multiplier
|
4.1
|
|
|
|
|
|
|