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									                            Cash Flow Analysis

                    Item                         Amount
Potential Gross Income                                 $1,762,500
Less: Allowances                                          141,000
Add: Other Income                                          84,000
Effective Gross Income                                 $1,705,500

Operating Expenses
 Management                                               $51,975
 Utilities                                               $277,200
 Taxes                                                   $259,875
 Insurance                                                $60,638
 Janitorial                                               $86,625
 Office                                                   $43,313
 Repairs/Maintenance                                     $103,950
 Reserves                                                 $39,458
Total Expenses                                           $923,034

Net Operating Income                                     $782,466

Capitalization Rate                                        12.0%
Value by Direct Capitalization                         $6,520,548
                                           Discounted Cash Flow Analysis

           Item                       Year 1       Year 2       Year 3       Year 4      Year 5      Reversion
Potential Gross Income                 $300,000     $306,000     $312,120     $318,362    $324,730     $331,224
Less: Allowances                         30,000       30,600       31,212       31,836      32,473       33,122
Add: Other Income
Effective Gross Income                 $270,000     $275,400     $280,908    $286,526    $292,257      $298,102

Operating Expenses
 Management                             $51,975      $53,015      $54,075     $55,156     $56,259       $57,385
 Utilities                              277,200      282,744      288,399     294,167     300,050       306,051
 Taxes                                  259,875      265,073      270,374     275,781     281,297       286,923
 Insurance                               60,638       61,851       63,088      64,350      65,637        66,949
 Janitorial                              86,625       88,358       90,125      91,927      93,766        95,641
 Office                                  43,313       44,179       45,063      45,964      46,883        47,821
 Repairs/Maintenance                    103,950      106,029      108,150     110,313     112,519       114,769
 Reserves                                39,458       40,247       41,052      41,873      42,711        43,565
Total Operating Expense                $108,000     $110,160     $112,363    $114,610    $116,903      $119,241

Net Operating Income                   $162,000     $165,240     $168,545    $171,916    $175,354      $178,861
Reversion Cap Rate                                                                                         0.12
Reversion Value                                                                                      $1,490,509
Discount Rate               12.0%       0.892857    0.797194     0.711780    0.635518    0.567427      0.567427
Present value                           $144,643    $131,728     $119,967    $109,256     $99,501      $845,755
Present value/cash flows              $1,450,849
Market Value (Rounded)                $1,451,000

Sale Price                            $1,500,000
Mortgage Position                        75.00%    $1,125,000 Mortgage
Equity Position                          25.00%      $375,000 Down Payment
Mortgage Constant                     0.1168295
 Rate                        8.00%
 Term (years)                    15
Annual Debt Service                    $131,433
Equity Dividend                         $30,567
Equity Dividend Rate                     8.15%
Cap Rate - Band of Investment           10.80%
Debt Coverage Ratio                        1.23
Net Income Ratio                           2.50
Operating Expense Ratio                    0.40



Annual change in income                                  2%           2%           2%          2%           2%
Annual change in expenses                                2%           2%           2%          2%           2%
Period (n)                                    1           2            3            4           5            5
                                                                         Discounted Cash Flow Analysis

        Item                     Year 1       Year 2       Year 3       Year 4       Year 5       Year 6       Year 7       Year 8       Year 9      Year 10      Reversion
Potential Gross Income          $1,762,500   $1,797,750   $1,833,705   $1,870,379   $1,907,787   $1,945,942   $1,984,861   $2,024,558   $2,065,050   $2,106,351    $2,148,478
Less: Allowances                   141,000     $143,820     $146,696     $149,630     $152,623     $155,675     $158,789     $161,965     $165,204     $168,508      $171,878
Add: Other Income                   84,000      $85,680      $87,394      $89,141      $90,924      $92,743      $94,598      $96,490      $98,419     $100,388      $102,396
Effective Gross Income          $1,705,500   $1,739,610   $1,774,402   $1,809,890   $1,846,088   $1,883,010   $1,920,670   $1,959,083   $1,998,265   $2,038,230    $2,078,995

Operating Expenses
 Management                        51,975      $53,015      $54,075      $55,156      $56,259       $57,385      $58,532      $59,703      $60,897      $62,115      $63,357
 Utilities                        277,200     $282,744     $288,399     $294,167     $300,050      $306,051     $312,172     $318,416     $324,784     $331,280     $337,905
 Taxes                            259,875     $265,073     $270,374     $275,781     $281,297      $286,923     $292,661     $298,515     $304,485     $310,575     $316,786
 Insurance                         60,638      $61,851      $63,088      $64,350      $65,637       $66,949      $68,288      $69,654      $71,047      $72,468      $73,917
 Janitorial                        86,625      $88,358      $90,125      $91,927      $93,766       $95,641      $97,554      $99,505     $101,495     $103,525     $105,595
 Office                            43,313      $44,179      $45,063      $45,964      $46,883       $47,821      $48,777      $49,753      $50,748      $51,763      $52,798
 Repairs/Maintenance              103,950     $106,029     $108,150     $110,313     $112,519      $114,769     $117,065     $119,406     $121,794     $124,230     $126,714
 Reserves                          39,458      $40,247      $41,052      $41,873      $42,711       $43,565      $44,436      $45,325      $46,232      $47,156      $48,099
Total Operating Expense          $923,034     $941,495     $960,325     $979,531     $999,122    $1,019,104   $1,039,486   $1,060,276   $1,081,482   $1,103,111   $1,125,174

Net Operating Income             $782,466     $798,115     $814,077     $830,359     $846,966     $863,905     $881,184     $898,807     $916,783     $935,119      $953,821

Discount Rate         12.0%       0.892857    0.797194     0.711780     0.635518     0.567427     0.506631     0.452349     0.403883     0.360610     0.321973      0.287476
Present value                     $698,630    $636,252     $579,444     $527,708     $480,591     $437,681     $398,603     $363,013     $330,601     $301,083      $274,201
Present value/cash flows        $5,027,809
Market Value (rounded)          $5,028,000

Sale Price                      $6,500,000
Mortgage Position                  70.00%    $4,550,000 Mortgage
Equity Position                    30.00%    $1,950,000 Down Payment
Mortgage Constant               0.1060792
 Rate                10.00%
 Term (years)             30
Annual Debt Service              $482,661
Equity Dividend                  $299,805
Equity Dividend Rate              15.37%
Cap Rate - Band of Investment     12.04%
Debt Coverage Ratio                  1.91
Net Income Ratio                     1.85
Operating Expense Ratio              0.54

Annual change in income                             2%           2%           2%           2%            2%          2%           2%           2%           2%            2%
Annual change in expenses                           2%           2%           2%           2%            2%          2%           2%           2%           2%            2%
Period (n)                              1            2            3            4            5             6           7            8            9            10            11
                                                    Monthly      Annual
Potential Gross Income (PGI)                          $1,440       $17,280

Less: Allowances                      5.0%              $72            $864
Add: Other Income                                      $100          $1,200

Effective Gross Income (EGI)                          $1,468       $17,616

Sale price                                          $100,000      $100,000

Potential Gross Income Multiplier                                       5.8
Effective Gross Income Multiplier                                       5.7
Gross Monthly Rent Multiplier                           69.4


                          PGIM      EGIM     GRM     $17,280        $17,616
                   1       5.8       5.7     69.4     5.9                5.8
                   2       5.8       5.9     69.2   $101,952 $     102,173
                   3       5.9       5.7     70.5
                   4       7.4       7.3     89.1
                   5       6.0       5.7     72.2
                                          Schedule of Income and Allowances

                                          Rent per    Gross                                  Rent/foot
           Item            Number        Unit/month Rnt/Annual      Size       Total Size    (annual)
2 bedroom units                    75            850    765,000        1,050        78,750         9.714
2 bedroom units                    25            725    217,500          980        24,500         8.878
1 bedroom units                    50            675    405,000          750        37,500       10.800
Efficiencies                       50            625    375,000          650        32,500       11.538
                                  200                $1,762,500                   173,250       $10.173

Potential Gross Income (PGI)                                      $1,762,500

Less: Allowance for Vacancies                  5.0%                  $88,125
Less: Allowance for Collections                3.0%                  $52,875
Add: Other Income                                                    $84,000

Effective Gross Income (EGI)                                      $1,705,500

Gross Rentable Area                                                  173,250
Effective Gross Income per square foot                                $9.844
            Schedule of Expenses

Gross Rentable Area = 173,250

           Item        $/GLA       Amount
 Management               $0.30      $51,975
 Utilities                 1.60      277,200
 Taxes                     1.50      259,875
 Insurance                 0.35       60,638
 Janitorial                0.50       86,625
 Office                    0.25       43,313
 Repairs/Maintenance       0.60      103,950
 Reserves                             39,458
Total Expenses            $5.10     $923,034
                               Schedule of Reserves

                   Rate = 9%
                                         Total   Expected    Sinking Fund     Amount of
      Item      Unit Cost   Number       Cost      life         Factor        Reserves
Roof              150,000            1   150,000    15            0.034059         5,109
Appliances
 Stove                300        200      60,000      12           0.049651        2,979
 Refrigerator         500        200     100,000      18           0.024212        2,421
 Disposal             350        200      70,000      10           0.065820        4,607
 Fan/hood             100        200      20,000      20           0.019546          391
 HVAC               2,000        200     400,000      12           0.049651       19,860
Paving            135,000          1     135,000      16           0.030300        4,090
                                                            Total Reserves       $39,458
                                   Mortgage Synopsis

Sale Price                                                     $5,000,000
Loan-to-Value Ratio (Mortgage Position)                              70%
Equity (Equity Position)                                             30%
Mortgage Amount                                                $3,500,000
Down Payment                                                   $1,500,000
Mortgage Term (years)                                                  20
Interest Rate                                                      10.0%

Mortgage Constant for $1 (from table)                           0.117460
Annual Debt Service                                             $411,109
Mortgage Constant (Debt service / Mortgage amount)              0.117460

Net Operating Income (year 1)                                   $782,466

Equity Dividend (before tax cash flow year 1)                   $371,357
Equity Dividend Rate (year 1)                                   24.757%

Debt Coverage Ratio (NOI / Annual Debt Service)                   1.9033

Cap rate by band of investment method
 Mortgage position x Mortgage Constant                          0.082222
 +Equity Position x Equity Dividend Rate                        0.074271
Cap rate by band of investment method                          15.6493%

Cap rate by the Debt Coverage Ratio Method
 Mortgage Constant x Debt Coverage Ratio x Mortgage Position      15.65%
           Item          Amount
Effective Gross Income    $1,436,400
Operating Expenses           814,446       OER = 56.7%
Net Operating Income        $621,954

Sale Price                $4,800,000         LTV =   70.0%
Capitalization Rate           13.0%     Mortgage =   $3,360,000
Mortgage Constant        0.11682954       Equity =   $1,440,000
Annual Debt Service         $392,547       Term =    15
Equity Dividend             $229,407        Rate =   8.00%
Equity Dividend Rate          15.9%
Debt Coverage Ratio               1.6
Band of Investment            13.0%
Debt Coverage Method          13.0%

								
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