The preliminary market analysis produces the following expected rent, vacancy, rent loss, and expenses during the first year of operation and expected annual growth rates for the next 10 years. Using this information and the hypothesized expected selling price at the end of year 10, build a 10-year proforma of net operating income (NOI) and net operating cash flow using Microsoft Excel.
German Apartments
Number of Units
232
1st Year
Growth Rate
Monthly gross rent per unit:
$885
3%
Vacancy rate
7.5%
1.5%
Rent losses
3%
0%
Rent concessions
$180,000
3%
Other income
$112,000
0%
Expense recoveries
$145,000
2%
Operating expenses (including recoveries)
$990,500
2%
CAPEX allowance
$185,000
2%
Propriety Disposal at the end of 10th year
Selling price
12 x Year 11 NOI
Selling commissions
5%