Real Estate

  1. Calculate the purchase price you would offer for acquisition of Bella Vista Apartments based on its current
    condition and the trailing twelve months of revenue and expenses.
  2. Calculate the maximum debt that could be obtained for this acquisition.
  3. Calculate the year one leveraged cash return on equity based on operating the property in its current
    condition after acquisition without renovations. Does this investment meet Global’s target return?
  4. Calculate the year one leveraged cash return on equity based on completing the renovations and increasing
    rents as described in the Value Add Opportunity section of the acquisition report. Does this investment meet
    Global’s target return?
  5. Provide an analysis of the financial risks associated with bothof the above scenarios –operate as-is without
    renovations and with increased rents after completing renovations.