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Week 3 team assignment analyzing risk and rewards of existing and proposed real estate projects

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Analyzing Risk and Rewards of Existing and Proposed Real Estate Projects
University of Phoenix
FIN/591
January 31, 2021

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Estimated Cash Flow for all Properties
Cash flows play a vital role in leasing businesses and projecting what can help boost your
industry or home. Projecting cash flows have many advantages such as predicting cash
shortages, estimating effects of business change, and determination to make adjustments for
owner’s ability to repay a loan on time. For Team 3 all properties generate a positive net cash
flow. Nicole’s property will generate a $6,136 cash flow, Don’s Property will generate a $3,555
cash flow, and Navnett’s property will generate a $6,282 with two months vacancy over 60
months. To ensure our projections stay accurate it is important for us to monitor sales during
peak seasons, months when premiums are due, and prevent unforeseen expenses and errors that
will impact upcoming projections.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Gross
Income
Less:
Vacancy
and
Collection
Loss (2
months
vacancy
over 60
months)
Equals:
Adjusted
Gross
Income
Less:
Operating
Expenses
(list routine
operating
expenses)
Equals: Net
Operating
Income
Less:
Mortgage
Payments
and
Reserves
Equals: Net
Cash Flow
Nicole
Don
Navnett

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1 Analyzing Risk and Rewards of Existing and Proposed Real Estate Projects University of Phoenix FIN/591 January 31, 2021 2 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 Nicole $10,000 Don Navnett $5,000 $0 Gross Income Less: Vacancy and Collection Loss (2 months vacancy over 60 months) Equals: Less: Equals: Net Less: Equals: Net Adjusted Operating Operating Mortgage Cash Flow Gross Expenses Income Payments Income (list routine and operating Reserves expenses) Estimated Cash Flow for all Properties Cash flows play a vital role in leasing businesses and projecting what can help boost your industry or home. Projecting cash flows have many advantages such as predicting cash shortages, estimating effects of business change, and determination to make adjustments for owner’s ability to repay a loan on time. For Team 3 all properties generate a positive net cash flow. Nicole’s property will generate a $6,136 cash flow, Don’s Property will generate a $3,555 cash flow, and Navnett’s property will generate a $6,282 with two months vacancy over 60 months. To ensure our projections stay accurate it is important for us to monitor sales during peak seasons, months when premiums are due, and prevent unforeseen expenses and errors that will impact upcoming projections. 3 Lease provision instead of the original purchase assumption Classifying landlords and tenants in each lease contract requirement recognizes whom the contract is among. The transaction ...
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