Assignment #1
Submission Type:
Using the information below on the Year 1 performance of a
multifamily property under consideration for acquisition develop the
following deliverables:
• Proforma of Years 1 through 5
• Excel Model
• 1 Page Executive Summary (.WORD document or .PDF document)
inclusive of:
• Year 1 Rent Roll
• The Purchase Price in $ based on the Proforma
• Year 5 Rent Roll
• The Sale Price in $ based on the Proforma
• Recommendation to Move Forward with the Purchase or
Pass (Go or No Go)
• Assume a 3% inflation on both revenues and expenses for
purpose of the property evaluation.
**For Bonus Credit Show and Discuss the Cash-On-Cash Levered
Returns in Each Year**
***For Bonus Credit Show The Senior Loan Debt Balance At The End
Of Each Year***
• Units: 150
• Market Rent: $2.00 per square foot
• Unit Mix:
• 25% – 700sf – 1 bedrooms
• 50% – 900sf – 2 bedrooms
• 25%- 1100sf – 3 bedrooms
• Physical Vacancy: Y1: 10% Y2: 8% Y3: 6% Y4: 5% Y5: 5%
• Concessions: None
• Bad Debt: 2%
• Other Income:
• $200 per month from laundry facility
• $50 late fee – Average Late Payments Per Month – 5 units
• Administrative Fees: $75 per unit annually
• Management Fees: 3% of Total Income
• Payroll: 1 Manager & 1 Maintenance Employee – Full Time @ $15 per hour rate
• Marketing: Quarterly Billboard @ $1000 per quarter & Weekly News Ad @ $250 per month contract
• Utilities: Water/Sewer Billed Quarterly – $25.00 per unit & Common Area Electric averages $700 per month
• Repair & Maintenance: Averages $250 per unit annually
• Grounds: $5,000 annual contract
• Property Taxes: 2018 Property Tax Assessment $50,000
• Insurance: 2018 Annual Premium $30,000
• Licenses: $1,000 annual city rental license
• Capital Reserve: $250 per unit annually
• Debt Terms:
• Rate: 5.50%
• Term: 5 years
• Amortization: 30 years
• Original Balance: 85% Loan-To- Value
• Value
• Y1 Purchase Price: 6.00% Cap Rate
• Y5 Sale Price: 7.50% Cap Rate