You just inherited $75,000 and you are considering investing all of the money in the construction of a multifamily property in: Last name: A -H: Portland, Ore. near 15800 NW West Union Last name: I - P: Renton, Wa. near 200 SW 5th Pl Last name: Q-Z: Spokane, Wa. Near 5111S Regal St You plan to build a duplex. Each unit will have 2 beds and 2 baths You plan to build a duplex. Each unit will have 2 beds and 2baths Market Competition use craigslist.org Determine the size in square feet and the rental prices for the nearest 5 competing rentalproperties with 2 bedroom / 2 bathroom units (include houses and apartments) Average rent $ Average size sf. Average rental rates per sf.Construction Costs: - use buildingjournal.com The building with 2 stories with // vinyl siding // no basement and // standard qualityContractor-25%, Design Fees-7%, Contingency-5% How many total square feet will you need to build for the two units based upon theaverage per unit size of the nearest 5 competing 2 bed/2 bath homes or apartments that are forrent For your area, what is the: Cost persquare foot: Total construction cost: How much will it cost to build the units using the www.buildingjournal prices, if the land costs $90,000? $. Financing If you used the entire inheritance for a down payment and have closing costs of $2,400, what will be your loanamount? What will be your monthly mortgage payments for a 25 year mortgage @4.8 % ? Potential Income How much monthly rent couldyou charge for each unit to be competitive with the nearest 5 competing properties? What is the maximum total GROSS potential monthlyrent for both units? per month With expenses @ 45% of gross rent // vacancy rate of 5% what is the NET monthly income? per month Whatis the income per month after the mortgage payments are deducted from the net income? Jer monthténtial Income How much monthly rentcould you charge for each unit to be competitive with the nearest 5 competing properties? What is the maximum total GROSS potentialmonthly rent for both units? per month With expenses @ 45% of gross rent // vacancy rate of 5% ... what is the NET monthly income? $per month What is the income per month after the mortgage payments are deducted from the net income? $ per month Additional notes:Market Competition If you have trouble finding 5 comparable 2 bedroom /2 bathroom on craigslist, you can also use any of the previous websites we have used to find comparables (Zillow, realtor.com, trulia.com...) If you still can't find 5 then you can use fewer comparables or lookat similar, but not exact comparables (2bed/1 1/2 bath, 2 bed/1 bath) Construction of Duplex (buildingjournal.com) If you have not yetcalculated the construction cost, use the residential estimator. The residential estimator allows for you to plug in building height, type ofsiding, basement... Financing When calculating mortgage payment Total property cost will be: Land cost + building cost Total mortgageamount = Total property cost - inheritance + closing costs Potential Income Maximum Total Gross Potential Rent (MTGPR) = 2 units.xeach unit's monthly rent NET monthly income = (all income minus all operating expenses except for loan payment) All Income = (MTGPR- rent not received because of vacancies + other income) All Income (MTGPR - (MTGPR * vacancy rate) + other income) For thisassignment other income = 0 Calculate all operating expenses @ 45% of gross rent Calculate NET monthly income for this example as pre-tax so tax bracket doesn't apply NET monthly income = (All Income - (MTGPR *.45)) Income per month after the mortgage payment =NET monthly income- mortgage Once again this is all pre- tax so tax bracket doesn't apply

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Size and Rental Prices of Competing Properties:You need to find the average rent, average size, and…