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tland, Ore. near 15800 NW West Union Last name: I - P: Renton, Wa. near 200 SW 5th Pl Last na al St You plan to build a duplex. Each unit will have 2 beds and 2 baths You plan to build a duplex. Market Competition use craigslist.org Determine the size in square feet and the rental prices for the ties with 2 bedroom / 2 bathroom units (include houses and apartments) Average rent $ Average uction Costs: - use buildingjournal.com The building with 2 stories with // vinyl siding // no base actor-25%, Design Fees-7%, Contingency-5% How many total square feet will you need to build e per unit size of the nearest 5 competing 2 bed/2 bath homes or apartments that are forrent For foot: Total construction cost: How much will it cost to build the units using the www.buildingjour

tland, Ore. near 15800 NW West Union Last name: I - P: Renton, Wa. near 200 SW 5th Pl Last na al St You plan to build a duplex. Each unit will have 2 beds and 2 baths You plan to build a duplex. Market Competition use craigslist.org Determine the size in square feet and the rental prices for the ties with 2 bedroom / 2 bathroom units (include houses and apartments) Average rent $ Average uction Costs: - use buildingjournal.com The building with 2 stories with // vinyl siding // no base actor-25%, Design Fees-7%, Contingency-5% How many total square feet will you need to build e per unit size of the nearest 5 competing 2 bed/2 bath homes or apartments that are forrent For foot: Total construction cost: How much will it cost to build the units using the www.buildingjour

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You just inherited $75,000 and you are considering investing all of the money in the construction of a multifamily property in: Last name: A - H: Portland, Ore. near 15800 NW West Union Last name: I - P: Renton, Wa. near 200 SW 5th Pl Last name: Q-Z: Spokane, Wa. Near 5111 S Regal St You plan to build a duplex. Each unit will have 2 beds and 2 baths You plan to build a duplex. Each unit will have 2 beds and 2 baths Market Competition use craigslist.org Determine the size in square feet and the rental prices for the nearest 5 competing rental properties with 2 bedroom / 2 bathroom units (include houses and apartments) Average rent $ Average size sf. Average rental rates per sf. Construction Costs: - use buildingjournal.com The building with 2 stories with // vinyl siding // no basement and // standard quality Contractor-25%, Design Fees-7%, Contingency-5% How many total square feet will you need to build for the two units based upon the average per unit size of the nearest 5 competing 2 bed/2 bath homes or apartments that are forrent For your area, what is the: Cost per square foot: Total construction cost: How much will it cost to build the units using the www.buildingjournal prices, if the land costs $ 90,000? $. Financing If you used the entire inheritance for a down payment and have closing costs of $2,400, what will be your loan amount? What will be your monthly mortgage payments for a 25 year mortgage @4.8 % ? Potential Income How much monthly rent could you charge for each unit to be competitive with the nearest 5 competing properties? What is the maximum total GROSS potential monthly rent for both units? per month With expenses @ 45% of gross rent // vacancy rate of 5% what is the NET monthly income? per month What is the income per month after the mortgage payments are deducted from the net income? Jer monthténtial Income How much monthly rent could you charge for each unit to be competitive with the nearest 5 competing properties? What is the maximum total GROSS potential monthly rent for both units? per month With expenses @ 45% of gross rent // vacancy rate of 5% ... what is the NET monthly income? $ per month What is the income per month after the mortgage payments are deducted from the net income? $ per month Additional notes: Market Competition If you have trouble finding 5 comparable 2 bedroom /2 bathroom on craigslist, you can also use any of the previous web sites we have used to find comparables (Zillow, realtor.com, trulia.com...) If you still can't find 5 then you can use fewer comparables or look at similar, but not exact comparables (2bed/1 1/2 bath, 2 bed/1 bath) Construction of Duplex (buildingjournal.com) If you have not yet calculated the construction cost, use the residential estimator. The residential estimator allows for you to plug in building height, type of siding, basement... Financing When calculating mortgage payment Total property cost will be: Land cost + building cost Total mortgage amount = Total property cost - inheritance + closing costs Potential Income Maximum Total Gross Potential Rent (MTGPR) = 2 units.x each unit's monthly rent NET monthly income = (all income minus all operating expenses except for loan payment) All Income = (MTGPR - rent not received because of vacancies + other income) All Income (MTGPR - (MTGPR * vacancy rate) + other income) For this assignment other income = 0 Calculate all operating expenses @ 45% of gross rent Calculate NET monthly income for this example as pre- tax so tax bracket doesn't apply NET monthly income = (All Income - (MTGPR *.45)) Income per month after the mortgage payment = NET monthly income- mortgage Once again this is all pre- tax so tax bracket doesn't apply
Transcribed Image Text:You just inherited $75,000 and you are considering investing all of the money in the construction of a multifamily property in: Last name: A - H: Portland, Ore. near 15800 NW West Union Last name: I - P: Renton, Wa. near 200 SW 5th Pl Last name: Q-Z: Spokane, Wa. Near 5111 S Regal St You plan to build a duplex. Each unit will have 2 beds and 2 baths You plan to build a duplex. Each unit will have 2 beds and 2 baths Market Competition use craigslist.org Determine the size in square feet and the rental prices for the nearest 5 competing rental properties with 2 bedroom / 2 bathroom units (include houses and apartments) Average rent $ Average size sf. Average rental rates per sf. Construction Costs: - use buildingjournal.com The building with 2 stories with // vinyl siding // no basement and // standard quality Contractor-25%, Design Fees-7%, Contingency-5% How many total square feet will you need to build for the two units based upon the average per unit size of the nearest 5 competing 2 bed/2 bath homes or apartments that are forrent For your area, what is the: Cost per square foot: Total construction cost: How much will it cost to build the units using the www.buildingjournal prices, if the land costs $ 90,000? $. Financing If you used the entire inheritance for a down payment and have closing costs of $2,400, what will be your loan amount? What will be your monthly mortgage payments for a 25 year mortgage @4.8 % ? Potential Income How much monthly rent could you charge for each unit to be competitive with the nearest 5 competing properties? What is the maximum total GROSS potential monthly rent for both units? per month With expenses @ 45% of gross rent // vacancy rate of 5% what is the NET monthly income? per month What is the income per month after the mortgage payments are deducted from the net income? Jer monthténtial Income How much monthly rent could you charge for each unit to be competitive with the nearest 5 competing properties? What is the maximum total GROSS potential monthly rent for both units? per month With expenses @ 45% of gross rent // vacancy rate of 5% ... what is the NET monthly income? $ per month What is the income per month after the mortgage payments are deducted from the net income? $ per month Additional notes: Market Competition If you have trouble finding 5 comparable 2 bedroom /2 bathroom on craigslist, you can also use any of the previous web sites we have used to find comparables (Zillow, realtor.com, trulia.com...) If you still can't find 5 then you can use fewer comparables or look at similar, but not exact comparables (2bed/1 1/2 bath, 2 bed/1 bath) Construction of Duplex (buildingjournal.com) If you have not yet calculated the construction cost, use the residential estimator. The residential estimator allows for you to plug in building height, type of siding, basement... Financing When calculating mortgage payment Total property cost will be: Land cost + building cost Total mortgage amount = Total property cost - inheritance + closing costs Potential Income Maximum Total Gross Potential Rent (MTGPR) = 2 units.x each unit's monthly rent NET monthly income = (all income minus all operating expenses except for loan payment) All Income = (MTGPR - rent not received because of vacancies + other income) All Income (MTGPR - (MTGPR * vacancy rate) + other income) For this assignment other income = 0 Calculate all operating expenses @ 45% of gross rent Calculate NET monthly income for this example as pre- tax so tax bracket doesn't apply NET monthly income = (All Income - (MTGPR *.45)) Income per month after the mortgage payment = NET monthly income- mortgage Once again this is all pre- tax so tax bracket doesn't apply
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