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<br />
<br />Pro-Forma With The MUPTE
<br />
<br />With MUPTEYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10
<br />
<br />
<br />
<br />Income$ 4,649,100$ 4,695,600$ 4,742,500$ 4,790,000$ 4,837,900$ 4,886,200$ 4,935,100$ 4,984,500$ 5,034,300$ 5,084,600
<br />
<br /> - Vacancy$ 232,500 $ 234,800 $ 237,100 $ 239,500 $ 241,900 $ 244,300 $ 246,700 $ 249,200 $ 251,700 $ 254,200
<br />
<br />
<br /> = Effective Gross Rent$ 4,416,600$ 4,460,800$ 4,505,400$ 4,550,500$ 4,596,000$ 4,641,900$ 4,688,400$ 4,735,300$ 4,782,600$ 4,830,400
<br />
<br /> - Operating Exp$ 1,413,300$ 1,427,500$ 1,441,700$ 1,456,200$ 1,470,700$ 1,485,400$ 1,500,300$ 1,515,300$ 1,530,400$ 1,545,700
<br />
<br /> - Property Tax
<br />
<br />$ (449,000)$ (462,500)$ (476,400)$ (490,700)$ (505,400)$ (520,600)$ (536,200)$ (552,300)$ (568,900)$ (586,000)
<br />(saved by MUPTE)
<br />
<br />
<br /> = NOI$ 3,452,300$ 3,495,800$ 3,540,100$ 3,585,000$ 3,630,700$ 3,677,100$ 3,724,300$ 3,772,300$ 3,821,100$ 3,870,700
<br />
<br />
<br /> - Debt Service$ 2,491,522$ 2,491,522$ 2,491,522$ 2,491,522$ 2,491,522$ 2,491,522$ 2,491,522$ 2,491,522$ 2,491,522$ 2,491,522
<br />
<br /> = CF$ 960,778 $ 1,004,278$ 1,048,578$ 1,093,478$ 1,139,178$ 1,185,578$ 1,232,778$ 1,280,778$ 1,329,578$ 1,379,178
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<br />
<br />Cash on Cash Return 8.7%9.1%9.5%9.9%10.4%10.8%11.2%11.6%12.1%12.5%
<br />
<br />Value$ 49,319,000$ 49,940,000$ 50,573,000$ 51,214,000$ 51,867,000$ 52,530,000$ 53,204,000$ 53,890,000$ 54,587,000$ 55,296,000
<br />
<br />
<br />DCR 1.39
<br />
<br />The pro-forma above shows the impact of the MUPTE. The Cash on Cash return reaches 8.7%
<br />in year 1 and 12.5% in year 10. The average return for the project over the ten-year period is
<br />10.6%. This is within the market expectation for Cash on Cash return. The project valuation is
<br />67% loan to value.
<br />
<br />Tax Savings Calculation
<br />The property tax savings from the MUPTE is calculated from the estimated value of the project:
<br />
<br />X–=
<br />Assessed Value Tax rate Land Property Tax MUPTE Savings
<br />
<br />XX
<br />Assessed Value = Value Changed Property Ratio = $44,034,000 0.5898 = $25,971,300
<br />Tax Rate = $18.18 per $1,000 in assessed value
<br />Land Property Tax = $11,200
<br />
<br />The land property tax must be subtracted out from the total tax because the MUPTE only
<br />applies to the value of the new improvements. The estimated property tax for the land is
<br />$11,200, which was estimated by the current assessed value of the land ($639,816).
<br />
<br />The estimated property tax savings from the MUPTE in year 1 is $450,000.
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