Apartment Complex:
15 1-Bedroom Units renting for $800/month
10 2-Bedroom Units renting for $950/month
5 3-Bedroom Units renting for $1100/month
Other Income is 2% of the Potential Gross Rent
Vacancy Allowance is 8% of Potential Gross Income
Loss Allowance is 3% of Potential Gross Income
Operating Expenses are 46% of Effective Gross Income
Current Market Lending Terms:
25-yr term, Interest Rate of 4.75%, 70% LTV, DCR = 1.30
BV/TV = 0.6 (use this to calculate the building value at 60% of the total property value)
Total property value = $2,650,000
COLA / Inflation is expected to be 2%
Sales Expense is 3.0%
Calculate the Cash Flows, IRR & NPV for an Individual Owner (Head of Household).