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Real Estate 306: Real Estate Process, Spring 2013 Assignment # 2 Name:____________________________ Student ID#:_______________________ ____________________________________________________________________________ This assignment is due by 5:00 p.m. on Friday, March 22nd uploaded to the course website. Please label your files Lastname_Firstname. You must show all work or assumptions used to receive full credit on the assignment, and the work MUST BE YOUR OWN. _____________________________________________________________________________ 1. Document Preview: Real Estate 306: Real Estate Process, Spring 2013 Assignment # 2 Name:____________________________ Student ID#:_______________________ ____________________________________________________________________________ This assignment is due by 5:00 p.m. on Friday, March 22nd uploaded to the course website. Please label your files Lastname_Firstname. You must show all work or assumptions used to receive full credit on the assignment, and the work MUST BE YOUR OWN. _____________________________________________________________________________ 1. Pro forma statement without finance Your company is considering making an investment in an apartment building. You will not use any debt (i.e. a mortgage) to buy the building (i.e. it will be all equity). The building has 40 two-bed room apartments and 15 three-bed room apartments. You assume that the monthly rent for two-bed room units is $1,875 and the rent for three-bed room apartments is $2,250. The building has 110 parking spaces. The charge for each of them is $125 per month. The projected information about the investment is as follows. Please construct the pro forma statement (round to dollars): Annual inflation of rents and parking charge 3% Vacancy and collection loss as of PGI 7% Parking Vacancy Allowance 6% Purchase Price / Current Assessed Value $6,050,000 Land value as % of the total value 24% Annual growth of assessed value in each of Years 2-5 3% Property tax mill rate 23 Other Operating Expenses (% of EGI) 42% Planned holding period 4 years Terminal cap rate (applied to 5th year?s NOI) 7.25% Selling cost as a % of Gross Sales Price 4.0% # of Years for calculating Depreciation 27.5 Capital gains tax rate 15% Depreciation Recapture tax rate 25% Income tax rate 35% Your after tax discount rate (After tax required rate of return) 8.75% Pro Forma Statement Yearly Cash Flows from Operations Year 1 Year... Attachments: Econ-306-HW-2....doc
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