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-15- <br />Net income (brought forward) <br />$64,331 <br />Capitalize at 9% <br />Assume financing available at 75% loan to value, 30 year loan <br />at 10.25%. Return on equity currently on good office buildings <br />ranges from no cash flow to 8% return depending upon desires <br />and needs of investor. Use 4% to reflect quality of property, <br />capital appreciation and equity build-up aspects, then: <br />.75 x .1075 factor to amortize loan 0.080 <br />.25 x .04 return on equity 0.010 <br />1TO-% composite rate —F.-656 <br />$643-331/.09 = $7145,789 <br />Total property value, assuming remodeling completed, <br />in round figures, $715,000 <br />Estimated cost of curing functional deficiencies <br />Off -site parking for approximately 20 spaces. <br />20 spaces @ $25 per month, $S00/mo or $6,000 <br />per annum. 6,000 sq. ft. lot @ $8.00 per sq.ft. <br />indicates land value at $50,000. Add $10,000 for <br />paving and striping, say $60,000 for parking lot. <br />This indicates a 10% return on lot income <br />Elevate floor in courtroom #2, 6" step-down into <br />jury room, step-up at entrance; furnish electri- <br />cal and duct work, $40,000 <br />Demolition, new partitions, floor covers and <br />utilities altered (at $10± per sq. ft.) $85,000 <br />Total cost to cure deficiences, 185,000 <br />Value of property by the income approach assuming <br />premise under highest and best use, $5300000 <br />