Estate of Eldon L. Auker, Deceased, Kimberlee J. Auker, Independent Personal Representative - Page 14

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               In applying the income capitalization method to each of the            
          apartment complexes, the appraisers used the band of investment             
          technique to ascertain a capitalization rate for each complex;              
          the band of investment technique ascertains an overall rate of              
          return by reference to a mortgage constant (or loan component)              
          and an equity dividend rate (or equity component).  Each                    
          complex's total income, expenses, and net operating income for              
          1991 were:                                                                  
                              The Landings  Fox Hill  Stonehenge                      
          Total income             $2,074,746  $1,703,700  $945,215                   
          Total expenses            1,968,850     706,700   407,592                   
          Net operating income     105,896     997,000   537,623                      
          and the appraisers ascertained the following pro forma operating            
          statements to factor into their analysis under the income                   
          capitalization method:                                                      
                                   The Landings   Fox Hill  Stonehenge                
          Gross possible rent      $2,826,720  $1,860,780  $1,014,060                 
          Less rebates                 (448,560)    (52,380)    (37,020)              
          Gross rents after rebates     2,378,160   1,808,400     977,040             
          Laundry rental income    39,000      10,400       7,600                     
          Carports rental income           14,400      29,754      13,306             
          Total income             2,431,560   1,848,554     997,946                  
          Vacancy                        (356,724)    (90,420)    (48,852)            
          Effective gross income        2,074,836   1,758,134     949,094             
          Less expenses                  (996,100)   (590,700)   (351,000)            
          Net income                 1,078,736   1,167,434     598,094                
               On the basis of market data, the appraisers calculated an              
          overall rate of return of 10.238 percent for The Landings.  The             
          components of this rate were:  (1) A mortgage constant of 7.238             
          percent, which was based on an 8.5-percent loan with a 25-year              




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