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Business, 13.10.2020 02:01 hannahbaak

Given the following owner’s income and expense estimates for an apartment property, formulate a reconstructed operat-ing statement. The building consists of 10 units that could rent for $550 per month each. Owner’s Income Statement Rental income (last year) Less: Operating & Capital Expenses Power Heat Janitor Water Maintenance Capital Expenditures Management Depreciation (tax) Mortgage payments $ 2,200 1,700 4,600 3,700 4,800 2,800 3,000 5,000 6,300 Estimating vacancy and collection losses at 5 percent of potential gross income, reconstruct the operating state-ment to obtain an estimate of NOI. Assume an above-line treatment of CAPX. Remember, there may be items in the owner’s statement that should not be included in the recon-structed operating statement. Using the NOI and an Ro of 11.0 percent, calculate the property’s indicate market value. Round your answer to the nearest $500.

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