Monday, April 30, 2012

FINANCIAL ANALYSIS

OVERVIEW:
HC Realty has performed an comprehensive financial analysis of the proposed Apartment Complex and we have concluded that it will be a viable business opportunity. The financial analysis was conducted based on the HC Realty's most likely ProForma. By using the most likely ProForma, our team was able to determine a realistic projection



FINANCING:
In order to acquire funding for Gateway Villas, we are going to obtain a loan from The Bank of the Ozarks. The following numbers are representative of similar market averages. 


Amortization Period25 years, 300 months

Interest Rate: 4.5%


Loan-to-Value: 65%


Discount Points: 1% of loan amount


Holding Period: 10 years


Acquisition Costs: $28,007,482.64


Selling Costs: 4% to our Investment Sales Broker at Holiday Fenoglio Fowler


"Going In" Cap Rate: 6.9%
Calculated using the Extraction Method utilizing Comporable Sales


"Residual" Cap Rate: 7.15%
Unknown market conditions may exist in future thus we have added 25 basis points to our Going In Cap Rate.




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