Income and Expense Pro Forma
# of Units
Rental Income
Vacancy & Credit Loss
Effective Gross income

Rent
4 $

Operating Expenses
Maintenance & Repairs:
Insurance:
Property Taxes:
Property Mgmt Fee:
Total Expenses
Net Operating Income:
Forecasted Annual Rent Increases
Forecasted Annual OE Increases
Vacancy Factor

Year 1
1,325 $
63,600
$ 3,180.0
$ 60,420.0

$
$
$
$
$
$

4,550
3,975
11,375
5,520
25,420
35,000

3.5%
3.5%
5.0%

After-Tax Cash Flows from Operations
Gross Potential Income
Vacancy & Credit Loss
Effective Gross income
Operating Expenses
Net Operating Income:
Debt Service:
Before Tax Cash Flow:
- Income Tax
After Tax Cash Flow

Year 1
$
63,600
$
3,180
$
60,420
$
25,420
$
35,000
$
19,002
$
15,998
$
3,598
$
12,400

Year 2
$
65,826
$
3,291
$
62,535
$
26,310
$
36,225
$
19,002
$
17,223
$
3,897
$
13,326

Year 3
$ 68,130
$
3,406
$ 64,723
$ 27,231
$ 37,493
$ 19,002
$ 18,491
$
4,337
$ 14,154

NPV/IRR Cash Flow Analysis
EOY

Initial
Investment
ATCF
0 $
(100,000)
1
$
2
$
3
$
4
$
5
$

Discount Rate:

Net Sales
Proceeds
12,400
13,326
14,154
15,011
15,772

Total Annual
CF
$ (100,000)
$
12,400
$
13,326
$
14,154
$
15,011
$ 185,124 $ 200,895
NPV
$67,912.55
IRR
12.99%

Present
Value
$ (100,000)
$ 11,273
$ 11,013
$ 10,634
$ 10,253
$ 124,740

10%

Supporting Exhibits
Mortgage Data
Purchase Price:
Loan to Value:
Initial Mortgage Balance:

Initial
Year 1
Year 2
Year 3
Year 4
$
400,000
75%
$
300,000
$292,868
$285,446
$277,721
$269,681

Interest Rate
Term (years):
Monthly Debt Service:
Annual Debt Service:
Interest:
Principal:
Tax Calculations
Net Operating Income:
- Interest Expense:
- Cost Recovery Allowance:
Taxable Income:
Ordinary Tax Rate
Income Tax:

$
$

4%
25
(1,584)
(19,002)
$
$

Year 1
$
$
$
$
$

35,000
11,870
10,280
12,850
28%
3,598

Depreciation
Purchase Price:
% of Value attributable to Improvements:
$ Depreciable Value of Improvements:
$ of Value attributable to Land:
Depreciable period in years
Depreciation per annum:
*Cost Recovery Allowance Year One:

After Tax Equity Reversion
Gross Selling Price:
- Selling Expenses:
Net Selling Price:
Mortgage Payoff:
Before Tax Equity Reversion
Capital Gains Tax
Depreciation Recapture Tax:
After Tax Equity Reversion:

Year 2
$
36,225
$
11,580
$
10,727
$
13,918
28%
$
3,897

$

$
$

455,000
64.84%
295,000
160,000
27.5
10,727