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purchase price. EPIC further projected that the following
appreciation rates would be required to recoup the invest-
ment in the properties after sales expenses of 7 percent
and the disposition fee of 2.5 percent to be paid to EPIC:
Appreciation
Investment Rates
End of 2d year $507,668 6.27
End of 3d year 541,663 6.41
End of 4th year572,185 6.22
EPIC's analysis of the transaction included a
computation of the rental deficit contribution. First,
EPIC personnel estimated that the project would generate a
monthly deficit of $2,101, taking into account estimated
monthly operating expenses of $7,961, tenant rentals of
$4,600 (with a vacancy rate of 11.7 percent), and monthly
contributions of investor capital of $1,798. According to
the analysis, the present value of the monthly deficit
over 36 months discounted at 13 percent is $62,364. The
analysis, which is reproduced below, designates this amount
as the rental deficit contribution:
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