Investment Assumptions
Price of Property	$1,550,000.00
Closing Costs	1% of Property Price
Date of Acquisition	1 January 2012
Holding Period	10 Years
Inflation Rate	5% per Year
Sale Price Method	Capitalize Current NOI
Sale Price Parameter	10% Net Cap Rate
Selling Costs	7% of Sale Price
Investor's Assumptions
General Vacancy & Credit Loss	Zero
Tax Rate - First Year	31%
Tax Rate - Following Years	31%
Capital Gain Rate	20%
Cost Recovery Recapture Rate	25% - Losses Carried Forward
Present Value Discount Rate Before Debt	12% per Year
Present Value Discount Rate Before Tax	12% per Year
Present Value Discount Rate After Tax	12% per Year
Members Assumptions
Total Initial Investment	$350,000.00
Working Capital Minimum	$5,000.00
Working Capital Maximum	$5,000.00
Working Capital Interest Rate	Zero
Managing Member Loan Interest Rate	0% per Year
Managing Member Tax Rate	35% per Year
Number of Units Issued	35
Cash Distribution Pattern	Quarterly in Jan, etc
Distribution Assumptions
Cash Distribution Start Date	1 January 2013
Preferred Return to Members	5% Cumulative
Cash to Members	80%
Net Taxable Income to Members	20%
Investment Return to Members	100% of Investment
Fee to Managing Member on Sale	None
Sale Proceeds to Members	Zero
Capital Gain to Members	Zero
Investment Tax Credit to Members	Zero
Building Depreciation Assumptions
Demonstrating the application of an 83% Asset-to-Value Ratio. By specifying it this way, we assure that the amount depreciated is adjusted when we vary the purchase price.
Depreciable Amount	83% of Property Price
Depreciable Life	27.5 Years
Depreciation Method	Straight Line
Depreciation Start Date	at Acquisition
Bank of America Loan Assumptions
Demonstrating the application of an 80% Loan-to-Value New Loan. By specifying it this way, we assure that the amount of the loan is adjusted when we vary the purchase price.
Loan Amount	80% of Property Price
Loan Interest Rate	10% Annually
Original Loan Period	30 Years
Loan Origination Date	at Acquisition
Loan Type	Monthly Payments, Amortizing
Balloon Payment Due	None
Amortize Points for Tax	Amortized over Loan Life
Loan Points Charged	1.5 Points
1 Bedroom Units Revenue Assumptions
Annual Revenue	$39,360.00
Revenue Start Date	at Acquisition
Revenue Period	Until Projected Sale
Revenue Growth Method	Annual at the Inflation Rate
Management Fee	5%
Vacancy Factor	5%
2 Bedroom Units Revenue Assumptions
Annual Revenue	$157,440.00
Revenue Start Date	at Acquisition
Revenue Period	Until Projected Sale
Revenue Growth Method	Annual at the Inflation Rate
Management Fee	5%
Vacancy Factor	5%
Laundry Revenue Assumptions
Annual Revenue	$3,600.00
Revenue Start Date	at Acquisition
Revenue Period	Until Projected Sale
Revenue Growth Method	Annual at the Inflation Rate
Management Fee	5%
Vacancy Factor	5%
Property Taxes Expense Assumptions
This California property is subject to Proposition 13, so the amount of property tax is 1.2% of the purchase price. By specifying it this way, we assure that the amount of tax is adjusted when we vary the purchase price.
Annual Expense	1.2% of Property Price
Expense Start Date	at Acquisition
Expense Period	Until Projected Sale
Expense Growth Method	Annual at 2% Annually
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	$1,200.00
Expense Start Date	at Acquisition
Expense Period	Until Projected Sale
Expense Growth Method	Annual at the Inflation Rate
Gardener Expense Assumptions
Annual Expense	$750.00
Expense Start Date	at Acquisition
Expense Period	Until Projected Sale
Expense Growth Method	Annual at the Inflation Rate
Utilities Expense Assumptions
Annual Expense	$4,800.00
Expense Start Date	at Acquisition
Expense Period	Until Projected Sale
Expense Growth Method	Annual at 2% Over Inflation
Resident Manager Expense Assumptions
Annual Expense	$10,000.00
Expense Start Date	at Acquisition
Expense Period	Until Projected Sale
Expense Growth Method	Annual at the Inflation Rate
Maintenance Expense Assumptions
Annual Expense	$3,200.00
Expense Start Date	at Acquisition
Expense Period	Until Projected Sale
Expense Growth Method	Annual at the Inflation Rate
Reserve Expense Assumptions
Reseves may be planned in several ways in planEASe. Here we have planned $3,200 annually to allow for unanticipated additional expenses.
Annual Expense	$3,200.00
Expense Start Date	at Acquisition
Expense Period	Until Projected Sale
Expense Growth Method	Annual at the Inflation Rate
Miscellaneous Expense Assumptions
Annual Expense	$1,200.00
Expense Start Date	at Acquisition
Expense Period	Until Projected Sale
Expense Growth Method	Annual at the Inflation Rate