COMMERCIAL REAL ESTATE INVESTMENT: ANALYSIS The property selected is an Auto Service Center located in Los Angeles, California. The sales price for the property is $2,050,000. The property is fully leased and generates an annual income of $199,000. The seller's projected internal rate of return (IRR) is 15.6 percent. Assumptions associated with the proposed investment are as follows:
First year expenses (including management): $63,000
Projected annual increase in expenses: 3.5 percent
Projected annual increase in income: 4.5 percent
Cash down payment required: 15 percent of sales price
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