Click on File/New Assumptions on menu bar.

Type in the specifications below, pressing enter after each completed entry, and click OK.

• Investment Name - 'Los Amigos Apartments'
• APOD Purpose - 'Broker's Recap'
• Property Location - '1000 Mayfair Avenue'
• Property Type - 'Apartment Complex'
• Square Feet or Units - '42'
• Fiscal Year Starts on< - 'Jan 1'
• Comments - Leave Blank.

• Price of Property - '6000000'
• Closing Costs - '1'
• Date of Acquisition - '1.10'
• Holding Period - '10'
• Inflation Rate - '4'
• Sale Price Method - Select Capitalize Next Year's NOI from the list
• Sale Price Parameter - '8'
• Selling Costs - '6'

Verifying Your Entries - Click on Basic button to bottom right, and wait a second. When the Basic Analysis screen appears, choose the Vertical view (at the bottom right of the screen). When done, click on Exit.

Click on the 'T' button next to General Vacancy & Credit Loss, type the following information.

• Tax Rate First Year - Federal “35” State “9.3”
• Tax Rate Following Years - Federal “35” State “9.3”
• Capital Gain Rate - Federal “15” State “0”
• Cost Recovery Recapture Rate - Federal “25” State “0”

Click Paste to paste the Tax Rates.

• General Vacancy & Credit Loss “0”
• Present Value Discount Rate Before Debt - “10”
• Present Value Discount Rate Before Tax - “10”
• Present Value Discount Rate After Tax - “10”

Click on Depr Depreciation in the Assumption Page List at the top right.

• A Depreciation Assumption Page will appear to the top left.

Type in the specifications below, pressing enter after each completed entry.

• Page Title - “Building”
• Depreciable Amount - “83”
• Depreciable Life - “27.5”
• Leave all the other default values as is.

This completes your Depreciation Assumption Page for the building. As you enter a specification, a message appears at the bottom of the page explaining the entry. Click on Depreciable Amount and you will see what entering 83 means. Similarly, click on Depreciable Life and you will see why you entered 27.5. planEASe permits you to enter any life or method so you can depreciate any type of item. If a property you are analyzing has more depreciable items than this tutorial, you can repeat this Edit/Add Page process until all depreciable items are entered. Check the Audit Window at the bottom left of the screen to view the cash flows you have just entered. It should look as shown here. The smaller value in the first (and last) year is due to application of the IRS’s “half-month” rule.

Verifying Your Entries - Click on Basic button to bottom right, and wait a second. When the Basic Analysis screen appears, choose the Vertical view (at the bottom right of the screen). When done, click on Exit.

Click on Rev Revenue in Assumption Page List to top right.

• A Revenue Assumption Page will appear to the top left.

Type “One Bedroom Units” in Page Title (over the default “Revenue” title), and press Enter.

• Notice that “One Bedroom Units” has replaced “Revenue” in the title. This title (or any that you enter in your own analyses) will automatically appear in all planEASe reports that show the revenue(s) for the One Bedroom Units. Look to the top right and you will see that Rev One Bedroom Units is now in the Assumption Page List.

Click on the 'C' button next to Annual Revenue.

• The pop up Calculator will appear. The Calculator can be configured to operate in Unit or SqFt mode, with rates entered as either Monthly or Annual.

Type the following information, pressing enter after each completed entry:

• Units - “10”
  
• $ / Unit / Mo - “1000”
• SqFt / Unit - “650”

and click Paste to paste the calculation into the Annual Revenue.

• The annual amount is automatically entered into Annual Revenue and shown italicized. Calculated numbers in the Assumption Pages are always italicized in planEASe so that you can tell they are based on the numbers you have entered into the Calculator. By entering these values into the Calculator, you not only accomplish the calculation, but also assure that the Units, SqFt and Rate/Unit will appear automatically in all planEASe reports and that display such information. One data entry accomplishes many results ...

Type in these specifications, pressing enter after each entry.

• Revenue Growth Method Select Annual (@ %> Inflation)
• Revenue Growth Rate “0” (at the Inflation Rate)
  
• Management Fee “5”
  
• Vacancy Factor “3”
  

You have now completed the One Bedroom Units revenues. The rents are growing at the inflation rate (5%). Leave all the other default values as is. Check the Audit Window at the bottom left of the screen to view the cash flows you have just entered. It should look as shown here. The $116,400 in the first year is different from your calculated value of $120,000 for the Annual Revenue due to the application of the 3% Vacancy Factor. That is, the Revenue Audit Window shows the Effective Income rather than the Gross Income. Other reports in planEASe show either Gross or Effective values (or both) as appropriate. The “99” in Revenue Period means this, or any Page, will last as long as the Holding Period you enter on the Gen Investment Page.

Click on Edit/Add Revenue Page on menu bar. A new Revenue Assumption Page appears for you to input more revenues. You can enter as many Pages as you desire.

Type in the specifications below, pressing enter after each entry.

• Page Title - “Two Bedroom Units”
• Revenue Growth Method - Select Annual (@ %> Inflation)
• Revenue Growth Rate - “0” (at the Inflation Rate)
• Vacancy Factor - “6”
• Management Fee - “5”

Click on the 'C' button next to Annual Revenue, then type the following information, pressing enter after each completed entry:

• Units - “32”
• $ / Unit / Mo - “1200”
• SqFt / Unit - “750”

click Paste to paste the calculation into the Annual Revenue.

You have now completed the Two Bedroom Units revenues. Look at the Assumption Page List to top right and you will see Rev One Bedroom Units and Rev Two Bedroom Units now appear in the list. Ensure your Audit Window appears as shown here. These units are growing at the inflation rate (6%) annually.

Click on Edit/Add Revenue Page on menu bar. A new Revenue Assumption Page appears for you to input more revenues. You can enter as many Pages as you desire.

Type in the specifications below, pressing enter after each entry.

• Page Title - “Laundry”
• Annual Revenue - “3600”
• Revenue Growth Method - Select Annual (@ %> Inflation)
• Revenue Growth Rate - “0” (at the Inflation Rate)
• Vacancy Factor - “5”
• Management Fee - “5”

You have now completed the Laundry revenue. Look at the Assumption Page List to top right and you will see Rev One Bedroom, Rev Two Bedrooms, and Laundry now appear in the list. Ensure your Audit Window appears as shown here. These units are growing at the inflation rate (5%) annually.

Verifying Your Entries

• Click on Basic button to bottom right, and wait a second. When the Basic Analysis screen appears, choose the Vertical view (at the bottom right of the screen).
• Click on the Detail Button to bottom right and view the screen. When done, click on Exit.

Click on Exp Expense in the Assumption Page List to the top right. An Expense Assumption Page will appear to the top left.

Type in the specifications below pressing enter after each entry.

• Page Title - “Property Taxes”
• Annual Expense - “1.2” (1.2% of Property Price)
• Expense Growth Method - Select Annual(@ Growth Rate)
• Expense Growth Rate - “2”
• Leave all the other default values as is.

This completes the Property Tax Expense Assumption Page. Taxes are growing at 2% - selecting Annual (@ Growth Rate) for the Expense Growth Method and entering 2% for the Expense Growth Rate will increase the expense every Jan by 2%. Check the Audit Window at the bottom left of the screen to view the cash flows you have just entered. It should look as shown here. Look to the top right Assumption Page List and you will see Exp Property Taxes is now on the list.

Click on Edit/Add Expense Page on menu bar, then type in specifications below for each expense page listed below. Select Annual@%>Inflation for each expense leaving the Expense Growth Rate at the "0" default except for “Utilities". 

• “Insurance” Annual Expense “9000”
• “Pool” Annual Expense “2400”
• “Gardener” Annual Expense “1000”
• “Utilities” Annual Expense “7200” Expense Growth Rate “2”
• “Resident Manager” Annual Expense “10000”
• “Maintenance” Annual Expense “5000”
• “Reserve” Annual Expense “5000”
• “Miscellaneous” Annual Expense “1000”

The Utilities Expense is projected to increase 2% faster than the inflation rate. By selecting Annual (@ %> Inflation) (5%) and entering 2% in the Expense Growth Rate the Utilities will grow at 7%. You can find further explanations of the Growth Method possibilities in planEASe by clicking on Help. Also, if you click on the Growth Method and then doubleclick in the white 2 line help message below the Assumption Page area, you will get full help about the Growth Methods available.

Click on the Reserve Expense, and click the Notes button next to the audit. Then type the following:

"Reserves may be planned in several ways in planEASe. Here we have planned $5,000 annually to allow for unanticipated additional expenses."

• These notes can be displayed in the assumptions report. It is your opportunity to communicate information about the assumptions beyond what is needed for planEASe to analyze the investment.

Verifying Your Entries

• Click on Basic button to bottom right, and wait a second. When the Basic Analysisscreen appears, choose the Vertical view (at the bottom right of the screen).
• Click on the Detail Button to bottom right and view the screen. When done, click on Exit.

Click on Loan Loan in the Assumption Page List to top right. A Loan Assumption Page will appear to the top left.

Type in the specifications below, pressing enter after each completed entry.

• Page Title - “USA BANK”
• Loan Amount - “80” % LTV or "1.2" DCR (Whichever is lower)
• Loan Interest Rate - “8”
• Original Loan Period - “20”
• Loan Points Charged - “1”
• Leave all the other default values as is.

Your loan is now entered into your planEASe analysis. The Loan Amount can be entered in three different ways; as a dollar amount (any amount over 100) as a percentage of the price/loan to value (any number between 3 and 100) as done with “80” here as a debt coverage ratio (any number less than 3 will be a DCR based on the NOI the year the loan starts) Additional loans can be entered the same way when needed in an analysis. Check the Audit Window at the bottom left of the screen to view the loan you have just entered. It should look as shown here. Of course, the number of loans for a property is unlimited.

Verifying Your Entries

• Click on Basic button to bottom right, and wait a second. When the Basic Analysis screen appears, choose the Vertical view (at the bottom right of the screen). When done, click on Exit.

Click on Depr Building in the Assumption Page List to the top right, then click on Edit/Add Depreciation Page on menu bar.

• A new Depreciation Assumption Page will appear to the top left. You have already created one Depreciation Assumption Page for the building. Remember how you added more Revenue and Expense Assumption Pages? You use the same steps to add more Depreciation Assumption Pages.

Type in the specifications below.

• Page Title - “Refrigerators”
• Depreciable Life - “5”
• Expenditure Date - “6.10”
• Depreciable Start Date< - “6.10”

You are assuming the refrigerators will be purchased 5 months after the building is acquired (on 1 June 2005) so the dates have to be changed from the acquisition default date.

Click on 'C' next to Depreciable Amount to bring up Calculator, type in the following specifications, then click Paste.

• Units - “42”
• $ / Unit - “550”

The calculated amount will appear in the Depreciable Amount in italics. Check the Audit Window at the bottom left of the screen to view the results of your work. It should look as shown here. Notice that $23,100 of Capital Spending has been scheduled in 2010 for the refrigerators. Since the Depreciation Start Date is after the Acquisition Date, planEASe presumes that you want to spend the money (what other reason could there be to start depreciation after the Acquisition Date?), and automatically schedules the spending. This completes the entries for the refrigerator.

Verifying Your Entries

• Click on Basic button to bottom right, and wait a second. When the Basic Analysis screen appears, choose the Vertical view (at the bottom right of the screen). When done, click on Exit.

You can vary any assumption that you entered, and see the resulting returns or ratios. Just to get you started here are a few to do.

Click on Sensitivity button to bottom right. You are now in Sensitivity Analysis. You are going to vary the price of the property and see how it affects the IRR After Tax.

Click on Price of Property to top left, then click on Rate of Return After Tax (IRR) to bottom left. Type in the specifications below, and press the Run button. Starting at “5500000" Stopping at “6000000" In Steps of “50000”

• You will see planEASe calculates the Price of Property versus Rate of Return After Tax for the values you entered. The After Tax IRR takes all the assumptions over the 10 year holding period into account. All assumptions that are link to the Price of Property (like Closing Costs and the Depreciation Amount) are changing at the same time.

Click on Another to Top right. Click on Price of Property to top left, then click on Net Capitalzation Rate to bottom left. Type in the specifications below, and press the Run button. Starting at “5500000" Stopping at “6000000" In Steps of “50000”

• You will see planEASe calculates the Price of Property versus Net Capitalization Rates for the values you entered. The Net Capitalization Rate takes Price of Property and the first year NOI in to account, and correlates to the Capitalization Rate in the Income & Annual Statements.

Click on Another to Top right. Click on Price of Property to top left, then click on Cash on Cash to bottom left. Type in the specifications below, and press the Run button. Starting at “5500000" Stopping at “6000000" In Steps of “50000”

• You will see planEASe calculates the Price of Property versus Cash on Cash for the values you entered. The Cash on Cash takes the Initial Equity and the first year Net Operating Cahs Flow in to account, and correlates to the Cash on Cash Before Tax in the Income & Annual Statements.

Obviously there are many assumptions that you can vary that would be of interest like the vacany factors, inflation rate, and sales price parameter (disposition cap rate) to name a few. Go ahead and do a few more.

APOD Video 4:45 Minutes

• Shows the Revenues, Expenses, Net Operating Income (NOI), Debt Service and Cash Flow Before Tax for the Property as of the Acquisition Date on either a monthly or annual basis. Also shows Capitalization Rate, Cash on Cash, Gross Income Multiple, Debt Coverage Ratio, Loan to Value and Loan Constant. Many Pie Charts are available here by adding the Graphics Extension.

• Detail Analysis (Loans, Depreciation, Revenues, and Expenses) - Creates reports for the projection results in detail areas of: Depreciation, Capital Spending, Tax Credits, Draw and Repay, Loan Interest, Loan Principal, Debt Service, Amortized Points, Revenue, Taxable Income, Management Fee, Expense, and Taxable Expense.

• Basic Analysis (IRR, NPV, MIRR) - Creates reports that include Before Tax Cash Flow Projection, Taxable Income Projection, and After Tax Cash Flow Projection. Measures shown include Internal Rate of Return (IRR), Net Present Value (NPV) and Modified Rate of Return (MIRR), all before and after tax.

• shows the cash required at acquisition, considering price, closing costs, and loan proceeds. Pie Charts are available here by adding the Graphics Extension.

• shows an Analysis of Sale Proceeds and Analysis of Capital Gain Results. Computes Net Sale Price for Tax Purposes, Adjusted Basis at Sale, Cost Recovery Taken, Cost Recovery Recapture Tax, and Tax on Adjusted Net Capital Gain, to show After Tax Cash Proceeds of Sale. Tax considerations may be eliminated by choosing 'Before Tax' instead of 'After Tax' at the screen top right. Pie Charts are available here by adding the Graphics Extension.

• Reports a complete income statement for 1 to 99 years, depending on the chosen holding period. Shows Income, Reimbursements, Expenses, NOI, Debt Service, Capital Expenditures, Before Tax Cash Flow, After Tax Cash Flow, and Sale Proceeds.. Then computes Capitalization Rate, Cash on Cash, Gross Income Multiple, Debt Coverage Ratio, Breakeven Occupancy, Loan Balance/Property Value, NOI/Property Value, Gross Income Multiple, Operating Expense Ratio, Internal Rate of Return (IRR), and Net Present Value (NPV) before and after tax for each of the years. Also shows Common Size and $/SquareFoot Reports. These reports may be configured in more than 5,000 variations by setting the list and checkboxes below the report on screen. MILLIONS of user configurable graphs are available here by adding the Graphics Extension.

• Shows a Square Foot or Unit based Rent Roll for the property being analyzed. The 'Monthly' checkbox allows you to show $/Month rather than $/Year, $/Month/RSF, etc. If your property leases include reimbursements, there will be a 'Include Reimbs' checkbox so the $ numbers can include those reimbursements or not. Pie Charts are available here by adding the Graphics Extension.

• Shows the Revenues, Expenses, Net Operating Income (NOI), Debt Service and Cash Flow Before Tax for the Property for the chosen time period (Month, Quarter or Year). Computes Capitalization Rate, Adj. Capitalization Rate, Cash on Cash Before Tax, Adj. Cash on Cash Before Tax, Cash on Cash After Tax, Adj. Cash on Cash After Tax, Accounting RoR Before Tax, Accounting RoR After Tax, Current RoR Before Tax, Current RoR After Tax, Debt Coverage Ratio, Breakeven Occupancy, Loan Balance/Property Value, NOI/Property Value, Gross Income Multiple, Operating Expense Ratio, IRR and NPV Before Debt, Before Tax or After Tax. Many Pie Charts are available here by adding the Graphics Extension.

• Shows (in English) the assumption values used to generate your analysis. 'Show Page Notes' allows you to generate the report with or without the optional page notes you can attach to each assumption page. 'Refer Revenues' allows you to skip the revenue assumption pages when you would prefer to use the Lease Analysis Reports to document your revenue assumptions instead.

• TitlePages is a Multiple Document Interface (MDI) word processor incorporated into planEASe to enable you to process and print documents that use the same Page Setup as your planEASe Reports and Graphs. Thus you may produce planEASe documents, reports and graphs bearing consecutive page numbers with the same appearance so that the entire presentation package appears to have been produced by the same software (as indeed it has).

• Adjustable Loans Video 3:15 Minutes
• Compare Loans Video 3:43 Minutes
• Compare Investments Video 1:47 Minutes
• Combine Investments Video 2:45 Minutes