Project Cost Summary
Apartment Development

Cost Item $/Unit Total % Total $
Hard Costs      
  Land 28,500.00 47.64% 2,850,000
  Sitework 8,550.00 14.29% 855,000
  Foundations & Floor Slab 3,892.00 6.51% 389,200
  Structure 2,660.00 4.45% 266,000
  Building Skin 4,616.00 7.72% 461,600
  Doors, Balconies 2,588.00 4.33% 258,800
  Roof Systems 2,064.00 3.45% 206,400
  Electrical 336.00 0.56% 33,600
  Exterior Contingency 792.00 1.32% 79,200
  Pool 1,500.00 2.51% 150,000
  Landscaping 1,104.00 1.85% 110,400
Total Hard Costs $56,602.00 94.62% $5,660,200
       
Soft Costs      
  Permits 100.00 0.17% 10,000
  Legal & Title 180.00 0.30% 18,000
Total Soft Costs $280.00 0.47% $28,000
       
Total Costs before Debt $56,882.00 95.09% $5,688,200
Plus: Draw Loan Interest & Fees $2,939.19 4.91% $293,919
Total Project Cost $59,821.19 100.00% $5,982,119
       


     


Project Bill of Materials
Apartment Development

Cost Item Quantity Cost/Item Total $
Hard Costs      
  Land 1.00 Each 2,850,000.00 2,850,000.00
  Sitework 1.00 Each 855,000.00 855,000.00
  Foundations & Floor Slab 1.00 Each 389,200.00 389,200.00
  Structure 1.00 Each 266,000.00 266,000.00
  Building Skin 1.00 Each 461,600.00 461,600.00
  Doors, Balconies 1.00 Each 258,800.00 258,800.00
  Roof Systems 1.00 Each 206,400.00 206,400.00
  Electrical 1.00 Each 33,600.00 33,600.00
  Exterior Contingency 1.00 Each 79,200.00 79,200.00
  Pool 1.00 Each 150,000.00 150,000.00
  Landscaping 1.00 Each 110,400.00 110,400.00
Total Hard Costs     $5,660,200.00
       
Soft Costs      
  Permits 1.00 Each 10,000.00 10,000.00
  Legal & Title 1.00 Each 18,000.00 18,000.00
Total Soft Costs     $28,000.00
       
Total Project Cost     $5,688,200.00
       


     


Project Cost Schedule
Apartment Development

Date Cost Item Quantity Cost/Item Total $
Feb 03 Permits 1.00 Each $10,000 $10,000
Feb 03 Legal & Title 1.00 Each $18,000 18,000
  Total     $28,000
         
Mar 03 Land 1.00 Each $2,850,000 $2,850,000
Mar 03 Sitework 1.00 Each $855,000 855,000
Mar 03 Foundations & Floor Slab 1.00 Each $389,200 389,200
  Total     $4,094,200
         
Apr 03 Structure 1.00 Each $266,000 $266,000
  Total     $266,000
         
May 03 Building Skin 1.00 Each $461,600 $461,600
May 03 Doors, Balconies 1.00 Each $258,800 258,800
May 03 Exterior Contingency 1.00 Each $79,200 79,200
May 03 Pool 1.00 Each $150,000 150,000
  Total     $949,600
         
Jun 03 Roof Systems 1.00 Each $206,400 $206,400
  Total     $206,400
         
Jul 03 Electrical 1.00 Each $33,600 $33,600
  Total     $33,600
         
Aug 03 Landscaping 1.00 Each $110,400 $110,400
  Total     $110,400
         
  Total Unit Costs     $5,688,200
         


     


Project Draw Loan Report
Apartment Development

This report shows the results of a Draw Loan specified in support of the Apartment Development development project. The results are based on drawing 100% of the eligible costs specified. Draws are scheduled to occur each month during the life of the project. The loan bears interest at 9.000% and interest is scheduled to be paid at month-end, as incurred.There are no loan fees projected.



Time		 Draw
Required
Payments		 Interest
Paid		 Loan
Balance
Feb 03 $28,000   $210 $28,000
Mar 03 $2,669,200   $20,229 $2,697,200
Apr 03 $266,000   $22,224 $2,963,200
May 03 $949,600   $29,346 $3,912,800
Jun 03 $206,400   $30,894 $4,119,200
Jul 03 $33,600   $31,146 $4,152,800
Aug 03 $110,400   $31,974 $4,263,200
Sep 03     $31,974 $4,263,200
Oct 03     $31,974 $4,263,200
Nov 03     $31,974 $4,263,200
Dec 03     $31,974 $4,263,200
Jan 04   $4,263,200    
Totals $4,263,200 $4,263,200 $293,919 $0


     


Proforma Income Statement
Apartment Development

  Jan 03 Feb 03 Mar 03 Apr 03 May 03 Jun 03 Jul 03 Aug 03 Sep 03 Oct 03 Nov 03 Dec 03 Jan 04 Feb 04 Mar 04 Apr 04 May 04 Jun 04
Gross Income                                    
  Studio $0 $0 $0 $0 $0 $0 $0 $0 $0 $447 $1,191 $1,934 $2,678 $3,422 $4,166 $4,909 $5,653 $6,397
  One Bedroom 0 0 0 0 0 0 0 0 0 881 2,435 3,989 5,543 7,096 8,650 10,204 11,758 13,312
  2 Bedroom 1 Bath 0 0 0 0 0 0 0 0 0 1,371 3,863 6,354 8,846 11,338 13,829 16,321 18,813 21,304
  2 Bedroom 2 Bath 0 0 0 0 0 0 0 0 0 987 2,678 4,368 6,059 7,749 9,440 11,130 12,821 14,511
  Laundry 0 0 0 0 0 0 0 0 0 22 42 62 82 102 121 141 161 181
Total Gross Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,708 $10,208 $16,707 $23,207 $29,706 $36,206 $42,706 $49,205 $55,705
  Less: Vacancy & Credit Loss 0 0 0 0 0 0 0 0 0 201 540 879 1,218 1,556 1,895 2,234 2,573 2,912
Effective Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,507 $9,668 $15,829 $21,989 $28,150 $34,311 $40,472 $46,632 $52,793
  Less: Operating Expenses                                    
  Management 0 0 0 0 0 0 0 0 0 175 483 791 1,099 1,408 1,716 2,024 2,332 2,640
  Utilities 0 0 0 0 0 0 0 0 0 105 290 475 660 845 1,029 1,214 1,399 1,584
  Property Tax 2,940 2,940 2,940 2,940 2,940 2,940 2,940 2,940 2,940 2,940 2,940 2,940 2,999 2,999 2,999 2,999 2,999 2,999
  Gardner 83 83 83 83 83 83 83 83 83 83 83 83 86 86 86 86 86 86
  Insurance 250 250 250 250 250 250 250 250 250 250 250 250 258 258 258 258 258 258
  Pool 83 83 83 83 83 83 83 83 83 83 83 83 86 86 86 86 86 86
  Reserve 0 0 0 0 0 0 0 0 0 35 97 158 220 282 343 405 466 528
Total Operating Expenses $3,357 $3,357 $3,357 $3,357 $3,357 $3,357 $3,357 $3,357 $3,357 $3,673 $4,227 $4,782 $5,407 $5,962 $6,516 $7,071 $7,625 $8,180
Net Operating Income ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($166) $5,441 $11,047 $16,582 $22,188 $27,795 $33,401 $39,007 $44,613
  Less: Debt Service                                    
  Construction Draw 0 210 20,229 22,224 29,346 30,894 31,146 31,974 31,974 31,974 31,974 31,974 0 0 0 0 0 0
  Permanent 0 0 0 0 0 0 0 0 0 0 0 0 35,542 35,542 35,542 35,542 35,542 35,542
Total Debt Service $0 $210 $20,229 $22,224 $29,346 $30,894 $31,146 $31,974 $31,974 $31,974 $31,974 $31,974 $35,542 $35,542 $35,542 $35,542 $35,542 $35,542
Net Operating Cash Flow ($3,357) ($3,567) ($23,586) ($25,581) ($32,703) ($34,251) ($34,503) ($35,331) ($35,331) ($32,140) ($26,533) ($20,927) ($18,960) ($13,354) ($7,747) ($2,141) $3,465 $9,071
Add: Debt Draw & Repay                                    
  Construction Draw 0 28,000 2,669,200 266,000 949,600 206,400 33,600 110,400 0 0 0 0 (4,263,200) 0 0 0 0 0
  Permanent 0 0 0 0 0 0 0 0 0 0 0 0 4,050,040 0 0 0 0 0
Total Debt Draw & Repay $0 $28,000 $2,669,200 $266,000 $949,600 $206,400 $33,600 $110,400 $0 $0 $0 $0 ($213,160) $0 $0 $0 $0 $0
  Less: Capital Spending                                    
  Land 0 0 2,850,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
  Sitework 0 0 855,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
  Foundations & Floor Slab 0 0 389,200 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
  Structure 0 0 0 266,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0
  Building Skin 0 0 0 0 461,600 0 0 0 0 0 0 0 0 0 0 0 0 0
  Doors, Balconies 0 0 0 0 258,800 0 0 0 0 0 0 0 0 0 0 0 0 0
  Roof Systems 0 0 0 0 0 206,400 0 0 0 0 0 0 0 0 0 0 0 0
  Electrical 0 0 0 0 0 0 33,600 0 0 0 0 0 0 0 0 0 0 0
  Exterior Contingency 0 0 0 0 79,200 0 0 0 0 0 0 0 0 0 0 0 0 0
  Pool 0 0 0 0 150,000 0 0 0 0 0 0 0 0 0 0 0 0 0
  Landscaping 0 0 0 0 0 0 0 110,400 0 0 0 0 0 0 0 0 0 0
  Permits 0 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
  Legal & Title 0 18,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Total Capital Spending $0 $28,000 $4,094,200 $266,000 $949,600 $206,400 $33,600 $110,400 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cash Flow Before Tax ($3,357) ($3,567) ($1,448,586) ($25,581) ($32,703) ($34,251) ($34,503) ($35,331) ($35,331) ($32,140) ($26,533) ($20,927) ($232,120) ($13,354) ($7,747) ($2,141) $3,465 $9,071
Taxable Income and Taxes                                    
  (Losses Carried Forward)                                    
Taxable Revenues $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,507 $9,668 $15,829 $21,989 $28,150 $34,311 $40,472 $46,632 $52,793
  Less: Deducted Expenses 3,357 3,357 3,357 3,357 3,357 3,357 3,357 3,357 3,357 3,673 4,227 4,782 5,407 5,962 6,516 7,071 7,625 8,180
  Less: Interest Expense 0 0 0 0 0 0 0 0 0 0 0 0 33,750 33,735 33,720 33,705 33,690 33,674
  Less: Depreciation                                    
  Sitework 0 0 0 0 0 0 0 0 0 2,308 2,308 2,308 3,000 3,000 3,000 3,000 3,000 3,000
  Foundations & Floor Slab 0 0 0 0 0 0 0 0 0 1,051 1,051 1,051 1,366 1,366 1,366 1,366 1,366 1,366
  Structure 0 0 0 0 0 0 0 0 0 718 718 718 933 933 933 933 933 933
  Building Skin 0 0 0 0 0 0 0 0 0 1,246 1,246 1,246 1,620 1,620 1,620 1,620 1,620 1,620
  Doors, Balconies 0 0 0 0 0 0 0 0 0 699 699 699 908 908 908 908 908 908
  Roof Systems 0 0 0 0 0 0 0 0 0 557 557 557 724 724 724 724 724 724
  Electrical 0 0 0 0 0 0 0 0 0 91 91 91 118 118 118 118 118 118
  Exterior Contingency 0 0 0 0 0 0 0 0 0 214 214 214 278 278 278 278 278 278
  Pool 0 0 0 0 0 0 0 0 0 405 405 405 526 526 526 526 526 526
  Landscaping 0 0 0 0 0 0 0 0 0 298 298 298 387 387 387 387 387 387
  Permits 0 0 0 0 0 0 0 0 0 27 27 27 35 35 35 35 35 35
  Legal & Title 0 0 0 0 0 0 0 0 0 49 49 49 63 63 63 63 63 63
  Total Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $7,661 $7,661 $7,661 $9,960 $9,960 $9,960 $9,960 $9,960 $9,960
Ordinary Income ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($3,357) ($7,512) ($1,906) $3,701 ($26,718) ($21,097) ($15,476) ($9,854) ($4,233) $1,389
Taxable Income 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
(Cum Suspended Losses) 0 0 0 0 0 0 0 0 0 0 0 35,930 0 0 0 0 0 111,920
Taxes Due (- = Savings) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash Flow After Tax ($3,357) ($3,567) ($1,448,586) ($25,581) ($32,703) ($34,251) ($34,503) ($35,331) ($35,331) ($32,140) ($26,533) ($20,927) ($232,120) ($13,354) ($7,747) ($2,141) $3,465 $9,071


     


Gross Income Detail
Apartment Development


                                     
Studio 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 1.2 1.9 2.7 3.4 4.2 4.9 5.7 6.4
One Bedroom 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.9 2.4 4.0 5.5 7.1 8.7 10.2 11.8 13.3
2 Bedroom 1 Bath 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.4 3.9 6.4 8.8 11.3 13.8 16.3 18.8 21.3
2 Bedroom 2 Bath 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 2.7 4.4 6.1 7.7 9.4 11.1 12.8 14.5
Laundry 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.2 0.2


     


Capital Spending Detail
Apartment Development


                                     
Land 0.0 0.0 2,850.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Sitework 0.0 0.0 855.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Foundations & Floor Slab 0.0 0.0 389.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Structure 0.0 0.0 0.0 266.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Building Skin 0.0 0.0 0.0 0.0 461.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Doors, Balconies 0.0 0.0 0.0 0.0 258.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Roof Systems 0.0 0.0 0.0 0.0 0.0 206.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Electrical 0.0 0.0 0.0 0.0 0.0 0.0 33.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Exterior Contingency 0.0 0.0 0.0 0.0 79.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Pool 0.0 0.0 0.0 0.0 150.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Landscaping 0.0 0.0 0.0 0.0 0.0 0.0 0.0 110.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Permits 0.0 10.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Legal & Title 0.0 18.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


     


Debt Draw & Repay Detail
Apartment Development


                                     
Construction Draw 0.0 28.0 2,669.2 266.0 949.6 206.4 33.6 110.4 0.0 0.0 0.0 0.0 -4,263.2 0.0 0.0 0.0 0.0 0.0
Permanent 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4,050.0 0.0 0.0 0.0 0.0 0.0


     


Cash Flow Before Tax
Apartment Development


                                     
  -3.4 -3.6 -1,448.6 -25.6 -32.7 -34.3 -34.5 -35.3 -35.3 -32.1 -26.5 -20.9 -232.1 -13.4 -7.7 -2.1 3.5 9.1


     


Proforma Income Statement
Apartment Development

  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Gross Income                    
  Studio $3,572 $77,878 $108,810 $112,074 $115,437 $118,900 $122,467 $126,141 $129,925 $133,823
  One Bedroom 7,305 162,070 226,688 233,488 240,493 247,708 255,139 262,793 270,677 278,797
  2 Bedroom 1 Bath 11,588 270,600 450,000 463,500 477,405 491,727 506,479 521,673 537,324 553,443
  2 Bedroom 2 Bath 8,033 184,280 306,000 312,120 318,362 324,730 331,224 337,849 344,606 351,498
  Laundry 127 2,198 3,023 3,113 3,207 3,303 3,402 3,504 3,609 3,717
Total Gross Income $30,623 $697,027 $1,094,520 $1,124,296 $1,154,903 $1,186,367 $1,218,710 $1,251,960 $1,286,140 $1,321,278
  Less: Vacancy & Credit Loss 1,620 40,065 109,452 112,430 115,490 118,637 121,871 125,196 128,614 132,128
Effective Income $29,003 $656,962 $985,068 $1,011,866 $1,039,413 $1,067,730 $1,096,839 $1,126,764 $1,157,526 $1,189,150
  Less: Operating Expenses                    
  Management 1,450 32,848 49,253 50,593 51,971 53,387 54,842 56,338 57,876 59,458
  Utilities 870 19,709 29,552 30,356 31,182 32,032 32,905 33,803 34,726 35,675
  Property Tax 35,284 35,990 36,709 37,444 38,193 38,956 39,736 40,530 41,341 42,168
  Gardner 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 1,305
  Insurance 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914
  Pool 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 1,305
  Reserve 290 6,570 9,851 10,119 10,394 10,677 10,968 11,268 11,575 11,892
Total Operating Expenses $42,894 $100,266 $130,670 $133,975 $137,367 $140,848 $144,421 $148,088 $151,852 $155,715
Net Operating Income ($13,891) $556,695 $854,398 $877,891 $902,046 $926,882 $952,418 $978,675 $1,005,674 $1,033,435
  Less: Debt Service                    
  Construction Draw 293,919 0 0 0 0 0 0 0 0 0
  Permanent 0 426,504 426,504 426,504 426,504 426,504 426,504 426,504 426,504 426,504
Total Debt Service $293,919 $426,504 $426,504 $426,504 $426,504 $426,504 $426,504 $426,504 $426,504 $426,504
Net Operating Cash Flow ($307,810) $130,191 $427,894 $451,387 $475,542 $500,378 $525,914 $552,171 $579,170 $606,931
Add: Debt Draw & Repay                    
  Construction Draw 4,263,200 (4,263,200) 0 0 0 0 0 0 0 0
  Permanent 0 4,050,040 0 0 0 0 0 0 0 0
Total Debt Draw & Repay $4,263,200 ($213,160) $0 $0 $0 $0 $0 $0 $0 $0
  Less: Capital Spending                    
  Land 2,850,000 0 0 0 0 0 0 0 0 0
  Sitework 855,000 0 0 0 0 0 0 0 0 0
  Foundations & Floor Slab 389,200 0 0 0 0 0 0 0 0 0
  Structure 266,000 0 0 0 0 0 0 0 0 0
  Building Skin 461,600 0 0 0 0 0 0 0 0 0
  Doors, Balconies 258,800 0 0 0 0 0 0 0 0 0
  Roof Systems 206,400 0 0 0 0 0 0 0 0 0
  Electrical 33,600 0 0 0 0 0 0 0 0 0
  Exterior Contingency 79,200 0 0 0 0 0 0 0 0 0
  Pool 150,000 0 0 0 0 0 0 0 0 0
  Landscaping 110,400 0 0 0 0 0 0 0 0 0
  Permits 10,000 0 0 0 0 0 0 0 0 0
  Legal & Title 18,000 0 0 0 0 0 0 0 0 0
Total Capital Spending $5,688,200 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cash Flow Before Tax ($1,732,810) ($82,969) $427,894 $451,387 $475,542 $500,378 $525,914 $552,171 $579,170 $606,931
Taxable Income and Taxes                    
  (Losses Carried Forward)                    
Taxable Revenues $29,003 $656,962 $985,068 $1,011,866 $1,039,413 $1,067,730 $1,096,839 $1,126,764 $1,157,526 $1,189,150
  Less: Deducted Expenses 42,894 100,266 130,670 133,975 137,367 140,848 144,421 148,088 151,852 155,715
  Less: Interest Expense 0 403,991 401,633 399,029 396,152 392,974 389,463 385,584 381,299 376,566
  Less: Depreciation                    
  Sitework 6,924 33,234 33,234 33,234 33,234 33,234 33,234 33,234 33,234 31,850
  Foundations & Floor Slab 3,152 15,128 15,128 15,128 15,128 15,128 15,128 15,128 15,128 14,498
  Structure 2,154 10,340 10,340 10,340 10,340 10,340 10,340 10,340 10,340 9,909
  Building Skin 3,738 17,943 17,943 17,943 17,943 17,943 17,943 17,943 17,943 17,195
  Doors, Balconies 2,096 10,060 10,060 10,060 10,060 10,060 10,060 10,060 10,060 9,641
  Roof Systems 1,671 8,023 8,023 8,023 8,023 8,023 8,023 8,023 8,023 7,689
  Electrical 272 1,306 1,306 1,306 1,306 1,306 1,306 1,306 1,306 1,252
  Exterior Contingency 641 3,079 3,079 3,079 3,079 3,079 3,079 3,079 3,079 2,950
  Pool 1,215 5,831 5,831 5,831 5,831 5,831 5,831 5,831 5,831 5,588
  Landscaping 894 4,291 4,291 4,291 4,291 4,291 4,291 4,291 4,291 4,113
  Permits 81 389 389 389 389 389 389 389 389 373
  Legal & Title 146 700 700 700 700 700 700 700 700 671
  Total Depreciation $22,984 $110,323 $110,323 $110,323 $110,323 $110,323 $110,323 $110,323 $110,323 $105,726
Ordinary Income ($36,875) $42,382 $342,442 $368,539 $395,571 $423,585 $452,633 $482,769 $514,052 $551,144
Taxable Income 0 5,507 342,442 368,539 395,571 423,585 452,633 482,769 514,052 551,144
(Cum Suspended Losses) 36,875 0 0 0 0 0 0 0 0 0
Taxes Due (- = Savings) 0 2,181 135,607 145,941 156,646 167,740 179,243 191,176 203,565 218,253
Cash Flow After Tax ($1,732,810) ($85,149) $292,287 $305,445 $318,896 $332,638 $346,672 $360,995 $375,605 $388,678
Sale Proceeds:                    
Sale Value ($126,300) $5,060,900 $7,767,300 $7,980,800 $8,200,400 $8,426,200 $8,658,300 $8,897,000 $9,142,500 $9,394,900
  Less: Sale Costs (6%) (7,578) 303,654 466,038 478,848 492,024 505,572 519,498 533,820 548,550 563,694
  Less: Loan Repayment 4,263,200 4,027,527 4,002,656 3,975,181 3,944,829 3,911,299 3,874,257 3,833,337 3,788,132 3,738,194
Sale Proceeds Before Tax (4,381,922) 729,719 3,298,606 3,526,771 3,763,547 4,009,329 4,264,545 4,529,843 4,805,818 5,093,012
  Less: Taxes due to Sale (1,222,946) (219,233) 323,587 391,305 460,171 530,202 601,417 673,874 747,608 822,640
Sale Proceeds After Tax (3,158,976) 948,952 2,975,019 3,135,466 3,303,376 3,479,127 3,663,127 3,855,969 4,058,209 4,270,372
Ratio Analysis:                    
Profitability Ratios                    
  Adj. Capitalization Rate   9.79% 15.02% 15.43% 15.86% 16.29% 16.74% 17.21% 17.68% 18.17%
  Adj. Cash on Cash Before Tax   9.14% 26.12% 27.55% 29.03% 30.55% 32.10% 33.71% 35.35% 37.05%
  Adj. Cash on Cash After Tax   (5.98%) 17.84% 18.65% 19.47% 20.31% 21.16% 22.04% 22.93% 23.73%
Risk Ratios                    
  Debt Coverage Ratio (0.047) 1.305 2.003 2.058 2.115 2.173 2.233 2.295 2.358 2.423
  Breakeven Occupancy 1099.9% 75.6% 50.9% 49.9% 48.8% 47.8% 46.8% 45.9% 45.0% 44.1%
  Loan Balance/Property Value (3375.5%) 79.6% 51.5% 49.8% 48.1% 46.4% 44.7% 43.1% 41.4% 39.8%
Assumption Ratios                    
  NOI/Property Value N/A 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00% 11.00%
  Gross Income Multiple (4.12) 7.26 7.10 7.10 7.10 7.10 7.10 7.11 7.11 7.11
  Operating Expense Ratio 140.1% 14.4% 11.9% 11.9% 11.9% 11.9% 11.9% 11.8% 11.8% 11.8%
Analysis Measures:                    
  IRR Before Debt     17.8% 17.3% 17.0% 16.9% 16.8% 16.7% 16.6% 16.6%
  IRR Before Tax     30.7% 28.7% 27.4% 26.6% 26.0% 25.6% 25.2% 24.9%
  IRR After Tax     24.2% 22.3% 21.2% 20.5% 20.0% 19.6% 19.3% 19.1%
  NPV Before Debt @10.00% ($5,671,997) ($1,154,859) $1,072,527 $1,339,975 $1,589,943 $1,823,533 $2,041,781 $2,245,756 $2,436,395 $2,614,535
  NPV Before Tax @10.00% ($5,672,155) ($1,170,755) $1,041,706 $1,295,665 $1,533,452 $1,756,047 $1,964,382 $2,159,426 $2,342,028 $2,512,944
  NPV After Tax @10.00% ($4,560,386) ($992,891) $688,478 $813,860 $931,277 $1,041,106 $1,143,721 $1,239,559 $1,328,992 $1,412,349


     


Cash Flow
Apartment Development

This graph follows the cash flow from Net Operating Income to After Tax. Net Operating Income is simply revenues less expenses. Net Operating Cash Flow subtracts the debt service, then the capital spending items like TI's, Commissions, etc. are subtracted to make up the Cash Flow Before Tax. Finally the tax considerations of the expenses, depreciation, loan interest, etc. are calculated for the Cash Flow After Tax.



  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Net Operating Income -13.9 556.7 854.4 877.9 902.0 926.9 952.4 978.7 1,005.7 1,033.4
Net Operating Cash Flow -307.8 130.2 427.9 451.4 475.5 500.4 525.9 552.2 579.2 606.9
Cash Flow Before Tax -1,732.8 -83.0 427.9 451.4 475.5 500.4 525.9 552.2 579.2 606.9
Cash Flow After Tax -1,732.8 -85.1 292.3 305.4 318.9 332.6 346.7 361.0 375.6 388.7


     


Adj Cash on Cash Before Tax
Apartment Development

Adj Cash on Cash Before Tax is Net Operating Cash Flow divided by Initial Equity adjusted both for additional investments and dispositions made since acquisition, and for additional loans and loan repayments since acquisition.



  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Net Operating Cash Flow -0.3 0.1 0.4 0.5 0.5 0.5 0.5 0.6 0.6 0.6
Total Capital Spending 5.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0


     


Debt Coverage Ratio
Apartment Development

Debt Coverage Ratio is the Net Operating Income divided by Debt Service, measuring the margin of safety for the lender in assuring that money will be available to service his loan. The debt coverage ratio takes the current year Net Operating Income and divides it by the current year Debt Service. If the Net Operating Income is greater than the Debt Service the Debt Coverage Ratio will be greater than 1.



  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Total Debt Service 293.9 426.5 426.5 426.5 426.5 426.5 426.5 426.5 426.5 426.5
Net Operating Income -13.9 556.7 854.4 877.9 902.0 926.9 952.4 978.7 1,005.7 1,033.4


     


IRR After Tax
Apartment Development

Internal Rate of Return (IRR)
The Internal Rate of Return (IRR) of an investment is defined as the Present Value Discount Rate that makes the Net Present Value of the Investment equal to zero.

You may think of the IRR as the annual Interest Rate or Yield (compounded annually) that the investment is paying you over the Holding Period. Naturally, the higher the yield, the better the investment.

Unlike the ratios (current year only) the IRR takes into account all the before tax cash flows up to the time of calculation. For this reason the IRR is sometimes called the time value of money, because it not only takes into account the value but also the time necessary to create the value. In addition to the Cash Flow After Tax and the Sales Proceeds After Tax the initial equity is included in this measure.



  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Cash Flow After Tax -1,732.8 -85.1 292.3 305.4 318.9 332.6 346.7 361.0 375.6 388.7
Sale Proceeds After Tax -3,159.0 949.0 2,975.0 3,135.5 3,303.4 3,479.1 3,663.1 3,856.0 4,058.2 4,270.4


     


Common Size Income Statement
Apartment Development

  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Gross Income                    
  Studio 11.7% 11.2% 9.9% 10.0% 10.0% 10.0% 10.0% 10.1% 10.1% 10.1%
  One Bedroom 23.9% 23.3% 20.7% 20.8% 20.8% 20.9% 20.9% 21.0% 21.0% 21.1%
  2 Bedroom 1 Bath 37.8% 38.8% 41.1% 41.2% 41.3% 41.4% 41.6% 41.7% 41.8% 41.9%
  2 Bedroom 2 Bath 26.2% 26.4% 28.0% 27.8% 27.6% 27.4% 27.2% 27.0% 26.8% 26.6%
  Laundry 0.4% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%
Total Gross Income 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
  Less: Vacancy & Credit Loss 5.3% 5.7% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
Effective Income 94.7% 94.3% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0%
  Less: Operating Expenses                    
  Management 4.7% 4.7% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5%
  Utilities 2.8% 2.8% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7% 2.7%
  Property Tax 115.2% 5.2% 3.4% 3.3% 3.3% 3.3% 3.3% 3.2% 3.2% 3.2%
  Gardner 3.3% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
  Insurance 9.8% 0.4% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3%
  Pool 3.3% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
  Reserve 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9%
Total Operating Expenses 140.1% 14.4% 11.9% 11.9% 11.9% 11.9% 11.9% 11.8% 11.8% 11.8%
Net Operating Income (45.4%) 79.9% 78.1% 78.1% 78.1% 78.1% 78.1% 78.2% 78.2% 78.2%
  Less: Debt Service                    
  Construction Draw 959.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Permanent 0.0% 61.2% 39.0% 37.9% 36.9% 36.0% 35.0% 34.1% 33.2% 32.3%
Total Debt Service 959.8% 61.2% 39.0% 37.9% 36.9% 36.0% 35.0% 34.1% 33.2% 32.3%
Net Operating Cash Flow (1005.2%) 18.7% 39.1% 40.1% 41.2% 42.2% 43.2% 44.1% 45.0% 45.9%
Add: Debt Draw & Repay                    
  Construction Draw 13921.5% (611.6%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Permanent 0.0% 581.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Total Debt Draw & Repay 13921.5% (30.6%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Less: Capital Spending                    
  Land 9306.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Sitework 2792.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Foundations & Floor Slab 1270.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Structure 868.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Building Skin 1507.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Doors, Balconies 845.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Roof Systems 674.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Electrical 109.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Exterior Contingency 258.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Pool 489.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Landscaping 360.5% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Permits 32.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
  Legal & Title 58.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Total Capital Spending 18574.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Cash Flow Before Tax (5658.5%) (11.9%) 39.1% 40.1% 41.2% 42.2% 43.2% 44.1% 45.0% 45.9%


     


Dollars/Unit Income Statement
Apartment Development

  2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Gross Income                    
  Studio $36 $779 $1,088 $1,121 $1,154 $1,189 $1,225 $1,261 $1,299 $1,338
  One Bedroom 73 1,621 2,267 2,335 2,405 2,477 2,551 2,628 2,707 2,788
  2 Bedroom 1 Bath 116 2,706 4,500 4,635 4,774 4,917 5,065 5,217 5,373 5,534
  2 Bedroom 2 Bath 80 1,843 3,060 3,121 3,184 3,247 3,312 3,378 3,446 3,515
  Laundry 1 22 30 31 32 33 34 35 36 37
Total Gross Income $306 $6,970 $10,945 $11,243 $11,549 $11,864 $12,187 $12,520 $12,861 $13,213
  Less: Vacancy & Credit Loss 16 401 1,095 1,124 1,155 1,186 1,219 1,252 1,286 1,321
Effective Income $290 $6,570 $9,851 $10,119 $10,394 $10,677 $10,968 $11,268 $11,575 $11,892
  Less: Operating Expenses                    
  Management 15 328 493 506 520 534 548 563 579 595
  Utilities 9 197 296 304 312 320 329 338 347 357
  Property Tax 353 360 367 374 382 390 397 405 413 422
  Gardner 10 10 11 11 11 12 12 12 13 13
  Insurance 30 31 32 33 34 35 36 37 38 39
  Pool 10 10 11 11 11 12 12 12 13 13
  Reserve 3 66 99 101 104 107 110 113 116 119
Total Operating Expenses $429 $1,003 $1,307 $1,340 $1,374 $1,408 $1,444 $1,481 $1,519 $1,557
Net Operating Income ($139) $5,567 $8,544 $8,779 $9,020 $9,269 $9,524 $9,787 $10,057 $10,334
  Less: Debt Service                    
  Construction Draw 2,939 0 0 0 0 0 0 0 0 0
  Permanent 0 4,265 4,265 4,265 4,265 4,265 4,265 4,265 4,265 4,265
Total Debt Service $2,939 $4,265 $4,265 $4,265 $4,265 $4,265 $4,265 $4,265 $4,265 $4,265
Net Operating Cash Flow ($3,078) $1,302 $4,279 $4,514 $4,755 $5,004 $5,259 $5,522 $5,792 $6,069
Add: Debt Draw & Repay                    
  Construction Draw 42,632 (42,632) 0 0 0 0 0 0 0 0
  Permanent 0 40,500 0 0 0 0 0 0 0 0
Total Debt Draw & Repay $42,632 ($2,132) $0 $0 $0 $0 $0 $0 $0 $0
  Less: Capital Spending                    
  Land 28,500 0 0 0 0 0 0 0 0 0
  Sitework 8,550 0 0 0 0 0 0 0 0 0
  Foundations & Floor Slab 3,892 0 0 0 0 0 0 0 0 0
  Structure 2,660 0 0 0 0 0 0 0 0 0
  Building Skin 4,616 0 0 0 0 0 0 0 0 0
  Doors, Balconies 2,588 0 0 0 0 0 0 0 0 0
  Roof Systems 2,064 0 0 0 0 0 0 0 0 0
  Electrical 336 0 0 0 0 0 0 0 0 0
  Exterior Contingency 792 0 0 0 0 0 0 0 0 0
  Pool 1,500 0 0 0 0 0 0 0 0 0
  Landscaping 1,104 0 0 0 0 0 0 0 0 0
  Permits 100 0 0 0 0 0 0 0 0 0
  Legal & Title 180 0 0 0 0 0 0 0 0 0
Total Capital Spending $56,882 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cash Flow Before Tax ($17,328) ($830) $4,279 $4,514 $4,755 $5,004 $5,259 $5,522 $5,792 $6,069


     


2005 Proforma Annual Statement
Apartment Development

This report is simular the income statement, but only shows one year. Here the report reflects the first year of the project completed and leased up.


Sale Value $7,767,300
  Less: Sale Costs (6%) 466,038
  Less: Loan Repayment 4,002,656
Sale Proceeds Before Tax 3,298,606
  Less: Taxes due to Sale 323,587
Sale Proceeds After Tax 2,975,019
Price $0
 -Loans 0
Down Payment 0
 +Acq Costs 0
 +Loan Points 0
Investment 0









  $/Unit % of GI Annual $
Gross Income      
  Studio $1,088 9.9% $108,810
  One Bedroom 2,267 20.7% 226,688
  2 Bedroom 1 Bath 4,500 41.1% 450,000
  2 Bedroom 2 Bath 3,060 28.0% 306,000
  Laundry 30 0.3% 3,023
Total Gross Income $10,945 100.0% $1,094,520
  Less: Vacancy & Credit Loss 1,095 10.0% 109,452
Effective Income $9,851 90.0% $985,068
  Less: Operating Expenses      
  Management 493 4.5% 49,253
  Utilities 296 2.7% 29,552
  Property Tax 367 3.4% 36,709
  Gardner 11 0.1% 1,061
  Insurance 32 0.3% 3,183
  Pool 11 0.1% 1,061
  Reserve 99 0.9% 9,851
Total Operating Expenses $1,307 11.9% $130,670
Net Operating Income $8,544 78.1% $854,398
  Less: Debt Service      
  Construction Draw 0 0.0% 0
  Permanent 4,265 39.0% 426,504
Total Debt Service $4,265 39.0% $426,504
Net Operating Cash Flow $4,279 39.1% $427,894
Add: Debt Draw & Repay      
  Construction Draw 0 0.0% 0
  Permanent 0 0.0% 0
Total Debt Draw & Repay $0 0.0% $0
  Less: Capital Spending      
  Land 0 0.0% 0
  Sitework 0 0.0% 0
  Foundations & Floor Slab 0 0.0% 0
  Structure 0 0.0% 0
  Building Skin 0 0.0% 0
  Doors, Balconies 0 0.0% 0
  Roof Systems 0 0.0% 0
  Electrical 0 0.0% 0
  Exterior Contingency 0 0.0% 0
  Pool 0 0.0% 0
  Landscaping 0 0.0% 0
  Permits 0 0.0% 0
  Legal & Title 0 0.0% 0
Total Capital Spending $0 0.0% $0
Cash Flow Before Tax $4,279 39.1% $427,894
Taxable Income and Taxes      
  (Losses Carried Forward)      
Taxable Revenues $9,851 90.0% $985,068
  Less: Deducted Expenses 1,307 11.9% 130,670
  Less: Interest Expense 4,016 36.7% 401,633
  Less: Depreciation      
  Sitework 332 3.0% 33,234
  Foundations & Floor Slab 151 1.4% 15,128
  Structure 103 0.9% 10,340
  Building Skin 179 1.6% 17,943
  Doors, Balconies 101 0.9% 10,060
  Roof Systems 80 0.7% 8,023
  Electrical 13 0.1% 1,306
  Exterior Contingency 31 0.3% 3,079
  Pool 58 0.5% 5,831
  Landscaping 43 0.4% 4,291
  Permits 4 0.0% 389
  Legal & Title 7 0.1% 700
  Total Depreciation $1,103 10.1% $110,323
Ordinary Income $3,424 31.3% $342,442
Taxable Income 3,424 31.3% 342,442
(Cum Suspended Losses) 0 0.0% 0
Taxes Due (- = Savings) 1,356 12.4% 135,607
Cash Flow After Tax $2,923 26.7% $292,287


Adj. Capitalization Rate 15.02%
Adj. Cash on Cash Before Tax 26.12%
Adj. Cash on Cash After Tax 17.84%
Debt Coverage Ratio 2.003
Breakeven Occupancy 50.9%
Loan Balance/Property Value 51.5%
NOI/Property Value 11.00%
Gross Income Multiple 7.10
Operating Expense Ratio 11.9%
IRR Before Debt 17.8%
IRR Before Tax 30.7%
IRR After Tax 24.2%
NPV Before Debt @10.00% $1,072,527
NPV Before Tax @10.00% $1,041,706
NPV After Tax @10.00% $688,478


     


2005 Use of Gross Income
Apartment Development



     


Property Sale Report
Apartment Development

This report shows the results of a projected sale of the Apartment Development on 31 December 2012. The Sale Price of $9,394,900 is projected by using a Net Capitalization Rate of 11% on the Net Operating Income of $1,033,439 projected to be received during the previous 12 months, according to the analysis assumptions.


Analysis of Sale Proceeds      
Sale Price (as discussed above) $9,394,900    
  - Costs of Sale (6%) 563,694    
  - Loan Balances 3,738,194    
  - Prepayment Penalties 0    
Sale Proceeds Before Tax     $5,093,012
       
Analysis of Capital Gain Results      
Sale Price $9,394,900    
  - Capitalized Costs of Sale (100%) 563,694    
Net Sale Price for Tax Purposes   $8,831,206  
       
Property Basis at Acquisition $0    
  + Capitalized Closing Costs (100%) 0    
  + Capital Additions 5,982,119    
  - Depreciation Taken 1,011,292    
  + Excess Depreciation Recaptured 0    
Adjusted Basis at Sale   4,970,827  
Capital Gain (or Loss)   $3,860,379  
  - Suspended Passive Losses   0  
Net Capital Gain (or Loss)   $3,860,379  
  - Cost Recovery Recaptured   1,011,292  
Adjusted Net Capital Gain (or Loss)   $2,849,087  
Cost Recovery Recapture Tax (@ 25%)     (252,823)
Tax on Adjusted Net Capital Gain (@ 20%)     (569,817)
       
Expenses Recognized at Sale      
Expensed Costs of Sale 0    
  + Accrued Loan Interest 0    
  + Unamortized Points 0    
  + Prepayment Penalties 0    
  - Excess Depreciation Recaptured 0    
Total Expenses Recognized at Sale   0  
Tax Savings Due to Sale Expenses (@ 39.6%)     0
Net Taxable Income   $3,860,379  
After Tax Cash Proceeds of Sale     $4,270,372


     


Sale Proceeds After Tax
Apartment Development



     


Sensitivity Analysis
Apartment Development

As you perform an analysis, planEASe measures the worth of the investment in terms of rates of return and net present values. Sensitivity Analysis allows you to investigate how these measures vary with a change in one of the assumptions. Any measure may be chosen for the Sensitivity Analysis, and any assumption may be chosen as well. Sensitivity Analysis provides a one page table and graph which describes the relationship between the assumption value and the resulting measure.


Land Development Cost
versus
Rate of Return After Tax

Assumption IRR
$2,300,000.00 23.3%
$2,530,000.00 21.5%
$2,760,000.00 19.7%
$2,990,000.00 18.2%
$3,220,000.00 16.8%


     


Sensitivity Analysis
Apartment Development

As you perform an analysis, planEASe measures the worth of the investment in terms of rates of return and net present values. Sensitivity Analysis allows you to investigate how these measures vary with a change in one of the assumptions. Any measure may be chosen for the Sensitivity Analysis, and any assumption may be chosen as well. Sensitivity Analysis provides a one page table and graph which describes the relationship between the assumption value and the resulting measure.


Foundations & Floor Slab Development Cost
versus
Rate of Return After Tax

Assumption IRR
$310,000.00 19.4%
$341,000.00 19.3%
$372,000.00 19.2%
$403,000.00 19.0%
$434,000.00 18.9%
$465,000.00 18.8%


     


Sensitivity Analysis
Apartment Development

As you perform an analysis, planEASe measures the worth of the investment in terms of rates of return and net present values. Sensitivity Analysis allows you to investigate how these measures vary with a change in one of the assumptions. Any measure may be chosen for the Sensitivity Analysis, and any assumption may be chosen as well. Sensitivity Analysis provides a one page table and graph which describes the relationship between the assumption value and the resulting measure.


One Bedroom Revenue Period
versus
Rate of Return After Tax

Assumption IRR
.25 Years 19.6%
.5 Years 19.4%
.75 Years 19.3%
1 Year 19.1%
1.25 Years 18.9%
1.5 Years 18.8%
1.75 Years 18.7%
2 Years 18.6%
2.25 Years 18.4%


     


Sensitivity Analysis
Apartment Development

General Vacancy & Credit Loss
versus
Rate of Return After Tax

Assumption IRR
Zero 19.1%
1% per Year 18.7%
2% per Year 18.4%
3% per Year 18.0%
4% per Year 17.6%
5% per Year 17.2%
6% per Year 16.9%
7% per Year 16.5%
8% per Year 16.2%
9% per Year 15.7%
10% per Year 15.3%


     


Risk Analysis
Apartment Development

As you perform an analysis, planEASe measures the worth of the investment in terms of rates of return and net present values. Risk Analysis allows you to investigate how these measures vary with a change in one or more of the assumptions. Any measure may be chosen for the Risk Analysis, and any group of assumptions may be chosen as well. Risk Analysis provides a one page table and graph which describes the relationship between the risky assumption values and the variability (or risk) of the resulting measure.


Risk Analysis Assumption Lowest Likely Highest
  Structure Development Cost $200,000.00 $266,000.00 $300,000.00
  Building Skin Development Cost $400,000.00 $461,600.00 $600,000.00
  Studio Revenue Period .25 Years 1 Year 2 Years
  One Bedroom Revenue Period .25 Years 1 Year 2 Years
  2 Bedroom 1 Bath Revenue Period .25 Years 1.25 Years 2.25 Years
  2 Bedroom 2 Bath Revenue Period .25 Years 1.25 Years 2.25 Years
  General Vacancy & Credit Loss Zero 5% per Year 10% per Year


Average IRR 17.4%   Lowest IRR 14.5%
Standard Deviation 1.0%   Highest IRR 20.5%
     


Analysis Assumptions Report
Apartment Development

Shows (in English) the assumptions used to generate the other reports. It was created with the idea of generating an assumptions report which can be presented to an investor or other concerned party to explain the assumptive basis of the other planEASe reports.


Investment Assumptions
Price of Property   None
Date of Acquisition   1 January 2003
Holding Period   10 Years
Inflation Rate   3% per Year
Sale Price Method   11% Capitalization of Last Year's NOI
Selling Costs   6%
     
Investor's Assumptions
General Vacancy & Credit Loss   Zero
Tax Rate - First Year   39.6%
Tax Rate - Following Years   39.6%
Capital Gain Rate   20%
Cost Recovery Recapture Rate   25% - Losses Carried Forward
Present Value Discount Rate Before Debt   10% per Year
Present Value Discount Rate Before Tax   10% per Year
Present Value Discount Rate After Tax   10% per Year
     
Land Development Spending Assumptions
Development Cost   $2,850,000.00
Depreciable Life   Non-Depreciable Asset
Depreciation Method   Straight Line
Include in Draws   50%
Expenditure Start   1 March 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Sitework Development Spending Assumptions
Development Cost   $855,000.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 March 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Foundations & Floor Slab Development Spending Assumptions
Development Cost   $389,200.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 March 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Structure Development Spending Assumptions
Development Cost   $266,000.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 April 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Building Skin Development Spending Assumptions
Development Cost   $461,600.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 May 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Doors, Balconies Development Spending Assumptions
Development Cost   $258,800.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 May 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Roof Systems Development Spending Assumptions
Development Cost   $206,400.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 June 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Electrical Development Spending Assumptions
Development Cost   $33,600.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 July 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Exterior Contingency Development Spending Assumptions
Development Cost   $79,200.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 May 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Pool Development Spending Assumptions
Development Cost   $150,000.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 May 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Landscaping Development Spending Assumptions
Development Cost   $110,400.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 August 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Permits Development Spending Assumptions
Development Cost   $10,000.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 February 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Legal & Title Development Spending Assumptions
Development Cost   $18,000.00
Depreciable Life   27.5 Years
Depreciation Method   Straight Line
Include in Draws   100%
Expenditure Start   1 February 2003
Depreciation Start Date   1 October 2003
Expenditure Months   1 Month
     
Construction Draw Assumptions
Draw Percent   100%
Draw Rate   9% Annually
Draw Period   1 Month
Draw Treatment   Paid and Capitalized
Draw Limit   None
Draw Points   None
     
Permanent Loan Assumptions
Loan Amount   95% of Draw Loan Balance
Loan Interest Rate   10% Annually
Original Loan Period   30 Years
Loan Origination Date   1 January 2004
Loan Type   Monthly Payments, Amortizing
     
Studio Revenue Assumptions
Annual Revenue   $900.00
Revenue Start Date   1 October 2003
Revenue Period   1 Year
Revenue Growth Method   Ramp to $108,000.00
Vacancy Factor   5%
     
Studio Continued Revenue Assumptions
Annual Revenue   Continuation
Revenue Start Date   Continuation
Revenue Period   Until Projected Sale
Revenue Growth Method   Annual at the Inflation Rate
Vacancy Factor   10%
     
One Bedroom Revenue Assumptions
Annual Revenue   $1,250.00
Revenue Start Date   1 October 2003
Revenue Period   1 Year
Revenue Growth Method   Ramp to $225,000.00
Vacancy Factor   5%
     
One Bedroom Continued Revenue Assumptions
Annual Revenue   Continuation
Revenue Start Date   Continuation
Revenue Period   Until Projected Sale
Revenue Growth Method   Annual at the Inflation Rate
Vacancy Factor   10%
     
2 Bedroom 1 Bath Revenue Assumptions
Annual Revenue   $1,500.00
Revenue Start Date   1 October 2003
Revenue Period   1.25 Years
Revenue Growth Method   Ramp to $450,000.00
Vacancy Factor   5%
     
2 Bedroom 1 Bath Continued Revenue Assumptions
Annual Revenue   Continuation
Revenue Start Date   Continuation
Revenue Period   Until Projected Sale
Revenue Growth Method   Annual at the Inflation Rate
Vacancy Factor   10%
     
2 Bedroom 2 Bath Revenue Assumptions
Annual Revenue   $1,700.00
Revenue Start Date   1 October 2003
Revenue Period   1.25 Years
Revenue Growth Method   Ramp to $306,000.00
Vacancy Factor   5%
     
2 Bedroom 2 Bath Continued Revenue Assumptions
Annual Revenue   Continuation
Revenue Start Date   Continuation
Revenue Period   Until Projected Sale
Revenue Growth Method   Annual at 1% Under Inflation
Vacancy Factor   10%
     
Laundry Revenue Assumptions
Annual Revenue   $150.00
Revenue Start Date   1 October 2003
Revenue Period   1 Year
Revenue Growth Method   Ramp to $3,000.00
Vacancy Factor   75%
     
Laundry Continued Revenue Assumptions
Annual Revenue   Continuation
Revenue Start Date   Continuation
Revenue Period   Until Projected Sale
Revenue Growth Method   Annual at the Inflation Rate
Vacancy Factor   10%
     
Management Expense as % of EI Assumptions
Expense Percentage   5% of Effective Income
Expense Start Date   at Acquisition
Expense Period   Until Projected Sale
     
Utilities Expense as % of EI Assumptions
Expense Percentage   3% of Effective Income
Expense Start Date   at Acquisition
Expense Period   Until Projected Sale
     
Property Tax Expense Assumptions
Annual Expense   $35,284.00
Expense Start Date   at Acquisition
Expense Period   Until Projected Sale
Expense Growth Method   Annual at 2% Annually
     
Gardner Expense Assumptions
Annual Expense   $1,000.00
Expense Start Date   at Acquisition
Expense Period   Until Projected Sale
Expense Growth Method   Annual at the Inflation Rate
     
Insurance Expense Assumptions
Annual Expense   $3,000.00
Expense Start Date   at Acquisition
Expense Period   Until Projected Sale
Expense Growth Method   Annual at the Inflation Rate
     
Pool Expense Assumptions
Annual Expense   $1,000.00
Expense Start Date   at Acquisition
Expense Period   Until Projected Sale
Expense Growth Method   Annual at the Inflation Rate
     
Reserve Expense as % of EI Assumptions
Expense Percentage   1% of Effective Income
Expense Start Date   at Acquisition
Expense Period   Until Projected Sale
     
fee Expense Assumptions
Annual Expense   $10,000.00
Expense Start Date   1 April 2000
Expense Period   None Specified
Expense Growth Method   Continuous at 1.04% Over Inflation