One-bedroom apartments rent

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Reference no: EM131252978

Jetson Village

You are evaluating a 200-unit apartment for Flintstone and Bubble Real Estate Group. The complex consists of 80 one-bedroom and 120 two-bedroom units. The one-bedroom apartments rent for $800 per month and the two-bedroom apartments rent for $1,200 per month.

The historic and market vacancy is eight percent. Expenses include Real estate taxes of $1,750 per unit, insurance is $350 per unit, utilities (water, sewer, etc.) is $200,000, maintenance and repairs is $350,000, and management and leasing is 10 percent of effective gross income.

VCU Capital is willing to make a loan based on the following: Loan to Value ratio 70 percent, 25-year amortization period, 5 percent annual interest rate with a 10-year call. Equity investors require a nine percent return.

Based on the information above, what is the property's value.

Reference no: EM131252978

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