Evaluating Currently Owned Property Performance Question

[Brian S.]

This is my first post here after reading for some time. I a have a few somewhat specific questions regarding analyzing the performance of currently owned properties that range from 90+ unit complexes to 5-6 unit mfd's I'm hoping someone can assist me with:

1. If I wanted to calculate a hybrid what-if internal rate of return for a currently owned property that has a balloon mortgage maturing in the next 4-5 years would it be appropriate to set up a model to do the following:

- Utilize actual/realized cash flows from the time of purchase to present. Should these prior cash flows be left as-is or discounted to the acquisition year? I'm thinking left as-is as they've already been realized.

- Factor in actual gains/losses on re-investments of past positive cash flows while projecting/discounting the future cash flows of those already held reinvestments (let's assume they're reinvested in fixed % cd's or savings accounts for simplicity).

- Projects future cash flows for the remaining term based on historical data/performance expectations, discounting these projected cash flows to the present day rather than the acquisition year (or am I wrong? If these were discounted to the acquisition year I assume the past cash flows would need to be as well). Future excess cash flows would be reinvested in the same reinvestment assets as previously, then discounted to the present day.

- Project various terminal year cash flows based on various potential sales prices to set up a "if the property sells for ___, then we'll return ___ " type of situation / table.

Would this be appropriate / logical?