Unit Mix Section - Part 1
Transcript
Welcome to this video. In this video, I am going to cover the Unit Mix tab of ARGUS Multi-Family Model to show you how to input renovation schedule and monthly rent.
Renovation Schedule
The first type of unit is small studio, and there are 27 small studio units in this apartment complex. Average square feet is 600. Then click the INPUT RENOVATION SCHEDULE button, a window called renovation schedule pops up. I will use this window to input the timing small studio units get renovated. The column header is year 1, year 2 and keep going to year 20. The row header is month 1, month 2 and keep going to month 12. The way I will read this table is: the intersection between year 1 and month 1 stands for the first month of the first year of my holding period, which is October 2023. You could revisit my second video in the ARGUS Multi-Family Model series that covers the basic information section to see where I input the deal cl ose date. If I follow this pattern and read the intersection between year 1 and month 2, that white box would stand for November 2023.
I am going to renovate 13 small studios in the first month of the first year, so I will input 13 in the first white box. And I will renovate 14 small studios in the first month of the second year, so I will input 14 in the second white box. Now all 27 small studios have been renovated. Let’s go to the TENENT MONTHLY tab, here you can see how many units start renovation, 13 in the first year, and 14 in the second year. Of course, if you have a different renovation schedule, it is easy to change. For example, I renovate 7 units in the first month of the second year and renovate another 7 units in the first month of the third year. Then go to TENENT MONTHLY tab, now we can see there is 13 in the first year, and 7 in the second year, 7 in the third year as well. The model will automatically recalculate itself based on the changes in the renovation schedule.
Then we can input our renovation schedule, click the INPUT RENOVATION PERIOD button, there are 20 years in the rows, 12 months in the columns, the first white box stands for how many months the small studio takes to be renovated. I assume that all of them take 2 months to be renovated, so I input 2 in the first white box, I can keep going like this until the last white box, but it is very time-consuming. Luckily, there are three buttons on the top: Copy Down button, Copy Across button, Copy Down and Across button. If I click the Copy Down button, the number in the active white box will duplicate to the bottom of the column. If I click the Copy Across button, the number in the active white box will duplicate all the way across the row. If I click the Copy Down and Across button, the number will duplicate across the board. I am going to save for now. Click the button and bring up the window again. I can see all the data has been saved. This window makes inputting data easier, and it stores the data in Tenant Monthly tab.
Now we can go to the RENOVATION SCHEDULE tab, the first table is what we just input. Renovate 13 units for the first year, and the renovation lasts for 2 months, these numbers will be highlighted so that I can see the input flows through in the model.
Monthly Rent
Then let’s move to the rent section, click the INPUT MONTHLY RENT button under the header of INPUT MONTHLY RENT PER UNIT BEFORE RENOVATION. We can set up the rent per unit before renovation here, assume that the rent for the first year is 1,500 dollars and click the copy Down and Across button. If the rent is going to be bumped up 4% in the second year. There is the operation white box on the top left corner. Type in *1.04 and click the Calc button in the first row. I can see the rent has increased by 4% in month 1 of each year. This is a powerful tool and time saver. There are 12 Calc buttons on the left, which correspond to different months to inflate the rent. I will click the Save button.
Then I will click the next INPUT MONTHLY RENT button under the header INPUT MONTHLY RENT PER UNIT AFTER RENOVATION. I assume that the rent after renovation for the first year is 1,875 dollars, then click the copy Down and Across button. Same as before, the rent grows by 4% each year for 20 years, then I input *1.04 in the operation box, then click CALC button, it will populate the white boxes automatically, then click save. Both rent before renovation and rent after renovation can be found in the TENANT MONTHLY tab.
Thank you for watching this video. I will see you in the next one.