[answered] Market Value Rent Rental growth # of unit Vacancy Operating

calculate the Broker's Rate based on the cash flows in problem 1 (a) , above. Your reaction with respect to the investment decision?

Market Value

 

Rent

 

Rental growth

 

# of unit

 

Vacancy

 

Operating expenses

 

Operating expenses gr

 

Loan to value

 

Interest rate

 

Maturity of mortgage

 

Financing cost

 

Depreciable basis

 

Depreciation life

 

Appreciation rate

 

Holding period

 

Marginal tax rate

 

Selling expenses

 

ROR Depreciation amount

 

Depreciation/Yr

 

Loan amount

 

MCm

 

Mca

 

ADS

 

AFC 2,500,000

 

1,200

 

3%

 

25

 

10%

 

130,000

 

3%

 

80%

 

5%

 

15

 

30,000

 

75%

 

27.5

 

3%

 

5

 

34%

 

6%

 

9% 340,909.09

 

68,181.82

 

2,000,000.00

 

0.0079079363

 

0.0948952352

 

189,790.47

 

2,000 Amortization Schedule

 

Year

 

0

 

1

 

2

 

3

 

4

 

5 ADS Interest 189,790.47

 

189,790.47

 

189,790.47

 

189,790.47

 

189,790.47 Principle 100,000.00

 

89,790.47

 

95,510.48

 

94,279.99

 

90,796.48

 

98,993.99

 

85,846.78 103,943.69

 

80,649.59 109,140.88 Operating Taxable Income Schedule

 

Year

 

1

 

2

 

3

 

4

 

5 NOI

 

194000.00

 

199820.00

 

205814.60

 

211989.04

 

218348.71 Year

 

1

 

2

 

3

 

4

 

5 NOI

 

194000.00

 

199820.00

 

205814.60

 

211989.04

 

218348.71 Interest

 

100,000.00

 

95,510.48

 

90,796.48

 

85,846.78

 

80,649.59 Dep

 

68,181.82

 

68,181.82

 

68,181.82

 

68,181.82

 

68,181.82 After-tax Cash Flow

 

ADS

 

189,790.47

 

189,790.47

 

189,790.47

 

189,790.47

 

189,790.47 NPV&IRR

 

Year Equity

 

ATCF

 

0

 

(500,000.0)

 

1

 

(3,888.65)

 

2

 

(1,573.89)

 

3

 

779.79

 

4

 

3,172.02

 

5

 

1,113,974.08

 

NPV

 

$221,963.71

 

IRR

 

17% TAX

 

8,098.18

 

11,603.42

 

15,244.34

 

19,026.55

 

16,155.88 Schedule NOI

 

Oustanding balance

 

2,000,000.00

 

1,910,209.53

 

1,815,929.54

 

1,716,935.54

 

1,612,991.85

 

1,503,850.97 Year

 

1

 

2

 

3

 

4

 

5 able Income Schedule

 

AFC

 

2,000

 

2,000

 

2,000

 

2,000

 

22,000 sh Flow

 

ATCF

 

(3,888.65)

 

(1,573.89)

 

779.79

 

3,172.02

 

12,402.36 OTI

 

23,818.18

 

34,127.71

 

44,836.31

 

55,960.44

 

47,517.30 PGI

 

360000.00

 

370800.00

 

381924.00

 

393381.72

 

405183.17 VBD

 

36000.00

 

37080.00

 

38192.40

 

39338.17

 

40518.32 Original basis

 

2,500,000.00

 

Cost recovery

 

340,909.09

 

Adjusted basis

 

2,159,090.91

 

Selling price

 

2,898,185.19

 

Selling expense

 

173,891.11

 

UMB

 

1,503,850.97

 

Taxible gain

 

565,203.17

 

Capital gain

 

224,294.07

 

Tax due on sale

 

118,871.38

 

ATER

 

1,101,571.72

 

PGIM

 

R

 

OER

 

DCR

 

EDR 6.94

 

0.08

 

0.40

 

1.02

 

0.01 TOE

 

130000.00

 

133900.00

 

137917.00

 

142054.51

 

146316.15 NOI

 

194000.00

 

199820.00

 

205814.60

 

211989.04

 

218348.71 PGI

 

Vacancy

 

OER

 

DCR

 

Loan interest

 

Loan term

 

NOI growth

 

Appreciation

 

Yield

 

Holding period 200000

 

4.50%

 

34%

 

1.2

 

5.00%

 

30

 

4%

 

4%

 

12%

 

5% NOI

 

Mca

 

Vm

 

ADS

 

NOI

 

ADS

 

BTCF

 

PV 126060

 

0.0644185948

 

1630740.32256

 

105050

 

1

 

126060

 

105050

 

21010

 

$18,758.93 PMTa

 

105050

 

MB

 

$1,497,488.16

 

SP5

 

1917140.81096

 

PV of BTER 238122.183203

 

V0

 

$1,978,093.58 2

 

131102.4

 

105050

 

26052.4

 

$20,768.81 3

 

136346.496

 

105050

 

31296.496

 

$22,276.23 4

 

5

 

141800.35584 147472.37007

 

105050

 

105050

 

36750.35584 42422.370074

 

$23,355.52

 

$24,071.59

 

$109,231.08

 

---

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DATE ANSWERED

Sep 18, 2020

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