Your client is interested in purchasing for all cash, Garden Park Apartments, a 100-unit apartment complex in Milford, CT. There are 50 one-bedroom units and 50 two-bedroom units. 47 one- bedroom units are currently rented at $1,500 per month and 45 two-bedroom units at $2,100 per month. Market rent for one -bedroom units is $1,700 per month and two-bedrooms are at $2,500 per month. All rents are plus utilities. Market vacancy rate is about 5.0%. The property generates laundry income of $20.per month per occupied unit. Operating Expenses are: RE Taxes $2,700 per unit per year, personal property tax is a total of $4,000 per year. Property insurance is $135.00 per unit Property Management is 5.5% of Gross operating income Payroll is $48,000 per year; Expense benefits are $11,000 and payroll taxes are 30% of payroll. Repairs and Maintenance is $200 per unit per year. Water is $1,500 quarterly, sewer tax is $2,000 semi-annually, common area electric is $750 per month, Common area Gas Heat is $600per month October to April and $175 May to September. Legal fees and accounting run about $6,000 per year The elevator permit is $450 Advertising runs about $4,100 per year Supplies run about $60 per unit Snow removal averages about $18,000 per year, Ground care runs about $70,000 per year Elevator Contract is $2,750 per quarter Develop a 5 Year Cashflow Before Tax Analysis, Vacancy rates will remain stable for years 1 & 2 at 4.5% and decline the third year forward to 4.0% Rental income will increase beginning in year two at 2.5% and year three forward 3.0% per year Other income will increase 3.0% each year Expense escalation will be 4.0% in year 2, 4.5% year three and 5.0% thereafter Cost of sale is 5.0% What is the NOI in year one and year of sale?
Your client is interested in purchasing for all cash, Garden Park Apartments, a 100-unit apartment complex in Milford, CT. There are 50 one-bedroom units and 50 two-bedroom units. 47 one- bedroom units are currently rented at $1,500 per month and 45 two-bedroom units at $2,100 per month. Market rent for one -bedroom units is $1,700 per month and two-bedrooms are at $2,500
per month. All rents are plus utilities.
Market vacancy rate is about 5.0%. The property generates laundry income of $20.per month per occupied unit.
Operating Expenses are:
RE Taxes $2,700 per unit per year, personal property tax is a total of $4,000 per year.
Property insurance is $135.00 per unit
Property Management is 5.5% of Gross operating income
Payroll is $48,000 per year; Expense benefits are $11,000 and payroll taxes are 30% of payroll. Repairs and Maintenance is $200 per unit per year.
Water is $1,500 quarterly, sewer tax is $2,000 semi-annually, common area electric is $750 per month, Common area Gas Heat is $600per month October to April and $175 May to September.
Legal fees and accounting run about $6,000 per year The elevator permit is $450
Advertising runs about $4,100 per year
Supplies run about $60 per unit
Snow removal averages about $18,000 per year, Ground care runs about $70,000 per year Elevator Contract is $2,750 per quarter
Develop a 5 Year Cashflow Before Tax Analysis,
Vacancy rates will remain stable for years 1 & 2 at 4.5% and decline the third year forward to 4.0%
Rental income will increase beginning in year two at 2.5% and year three forward 3.0% per year Other income will increase 3.0% each year
Expense escalation will be 4.0% in year 2, 4.5% year three and 5.0% thereafter
Cost of sale is 5.0%
What is the NOI in year one and year of sale?
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