Discounted Cash Flows

Discounted Cash Flows:
Year	0	1	2	3	4	5	6	7	8	9	10	11
Purchase Price	(197,900)
Potential Gross Income (PGI)		25,440	26,203	26,989	27,799	28,633	29,492	30,377	31,288	32,227	33,193	34,189
Other Income (OI or PGMI)		0	0	0	0	0	0	0	0	0	0	0
(Vacancy & Collection Loss) (VCL)		(2,162)	(2,227)	(2,294)	(2,363)	(2,434)	(2,507)	(2,582)	(2,659)	(2,739)	(2,821)	(2,906)
Effective Gross Income (EGI)		23,278	23,976	24,695	25,436	26,199	26,985	27,795	28,629	29,487	30,372	31,283
Operating Expenses (OE)		(6,390)	(6,518)	(6,648)	(6,781)	(6,917)	(7,055)	(7,196)	(7,340)	(7,487)	(7,637)	(7,789)
Net Operating Income (NOI)		16,888	17,458	18,047	18,655	19,282	19,930	20,598	21,288	22,000	22,735	23,494
(Debt Service) (DS)		(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)	(6,390)
Before Tax Cash Flow	(118,740)	10,498	11,068	11,657	12,265	12,892	13,540	14,208	14,898	15,610	16,345	17,104
Sales Price	276,397
Loan Balloon Payment	(35,437)
Before Tax Sales Revenue	240,960
	Unleveraged Cash Flow			Leveraged Cash Flow			General Assumptions
Cap Rate : 8.5%	Time	$		Time	$		Rental Growth Rate	1.03
Interest Rate : 2.625%: 15-Year Fixed	0	(197,900)		0	(118,740)		Expense Growth Rate	1.02
	1	16,888		1	10,498		VCL (8.5%)	0.085
	2	17,458		2	11,068		Expense Ratio
	3	18,047		3	11,657		Terminal Capitalization Rate	0.085
	4	18,655		4	12,265
	5	19,282		5	12,892
	6	19,930		6	13,540		Loan Assumptions	Monthly
	7	20,598		7	14,208		Loan to Value (40%)	70,160
	8	21,288		8	14,898		Interest Rate	2.63%
	9	22,000		9	15,610		Amortization Period	15 year
	10	22,735		10	257,306		Payments per year	12
	Sales Price:	276,397					Payment	532.50 a month
	NPV:	$ 185,405.48		NPV:	$ 181,652.09		Balloon Payment	$  35,437.00
	IRR:	0.1192		IRR:	0.1551