Question

You are a real estate investor that has an interest in purchasing a multifamily property in Atlanta, Georgia. You received th
42. What is the before tax cash flow at the end of year 3? 43. What is the Levered IRR for this project? 44. Based upon your


D E F CASH FLOW ANALYSIS POTENTIAL RENTAL INCOME YEAR 1 YEAR 2 YEAR 3 397500409425 421707. 8 YEAR 4 YEAR 5 YEAR 6 434359 4473
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Answer #1

1) Potential Rental Income in Year 3 = $421,707.75

2) Year 4 Other Income is $1,273.45

3)  Year 6 Net Operating Income = $250,284.59

4) Projected Sales Price = Net Operating Income / Capitalisation Rate
= 250,284.59 / 7%
Projected Sales Price = $3,575,494.12

5) Cost of Sales = 6% * Sales Price = $214,529.65

6) Sales Proceeds before Taxes = Sales Price - Cost of Sales
= 3,575,494.12 - 214,529.65
  Sales Proceeds before Taxes = $3,360,964.47

O 2 6 F Year 4 5 Potential Rental Income 397,500.00 409,425.00 421,707.75 434,358.98 447,389.75 (-) Vacancy Loss (19,875.00)
G H Year 1 2 Potential Rental Income =B4 =E2*(1+$B$5) |=F2*(1+$B$5) =G2*(1+$B$5) =H2*(1+$B$5) =12*(1+$B$5) (-) Vacancy Loss =


answered by: ANURANJAN SARSAM
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