1. Which of the following is not an approach to find the loan-to-value of a land loan?

Income approach

Cost approach

Comparable approach

Eligible VS ineligible costs approach

2. What is the value of the land lift of a property that has cash cost to purchase and rezone of $10,000,000, appraised value of $15,000,000, and loan-to-value of 40%?

5,000,000

6,000,000

4,500,000

4,000,000

Please download and open the attached files. Use the provided assumptions to complete the financial model. The same file will be used for the following 12 questions.

To set up a dynamic date that is one month later than the previous date, you would use this formula: (e.g. if previous date is Jan 5, then the formula would return Feb 5) (Hint, there are 2 correct answers)

=EOMONTH("previous date",1)

=EDATE("previous date",1)

=DATE(YEAR("previous date"),MONTH("previous date")+1,DAY("previous date"))

Please complete the sales assumptions calculations using the assumption provided. What is the total net proceeds of this development?

72,000,000

1,331,800

70,100,000

1,440,000

Please complete the revenue build up section of the financial model using the assumption provided. Which period (# of month) did you sell out all of the townhomes?

35

18

29

24

Please complete the development costs section of the financial model using the assumption provided. What is the total development costs of this entire project?

45,015,000

54,678,000

43,246,000

40,645,000

Please complete the financing section of the financial model assuming the opening balance is $0. What is the max loan amount?

28,795,879

30,546,105

26,496,164

25,674,961

Please complete the levered free cash flow section using the assumption provided. What is the equity balance (cumulative FCF)?

20,616,000

15,616,000

18,644,000

16,669,000

Please complete the levered free cash flow section using the assumption provided. What is the levered IRR percentage?

28.7

40.5

34.3

37.4

Please complete the cash flow waterfall section using the assumption provided. During which period (# of months) does the last distribution of cash flow of tier 1 happen?

34

28

40

37

Please complete the cash flow waterfall section using the assumption provided. What is the IRR for LPs?

34.3

40.5

37.4

28.7

Please complete the cash flow waterfall section using the assumption provided. What is the project NPV if discount rate was 10%?

9,416,544

13,511,476

12,354,657

16,854,166

Now that you have completed the financial model, please ensure that you have the iterative calculation function enabled. In the Deal Summary sheet, under the Purchase Financing & Costs section, what is the Max Loan Amount after solving for the circular reference?

30,561,034

25,964,613

24,879,465

28,565,949

Please complete the sensitivity analysis section. What would be the project IRR if the sales price and building costs both went up by 5%?

36.6%

31.7%

41.4%

42.2%

- Schedule Transaction Date Sales Start Construction Start Construction End 1-Apr-17 1-Sep-18 1-Oct-17 1-Dec-18 30% % Sold at Commencement Units Sold/Month % Closed at Completion Units Closed Per Month Post Development Costs Land Building Costs Servicing Hard Contingency DCCs Consulting & Warranty Finance / Bank Costs - Other Marketing Overhead Soft Contingency 50% Commissions TOTAL $30,000,000 10,000,000 1,500,000 5% 225,000 700,000 225,000 800,000 850,000 5% 5.0% 20% Property Stats (Square Feet) Gross Site Area Deductions 120,000 40,000 # of Units 50 Pre-Construction Spending ($/month) 100,000 FSR GBA Constr. GBA Net Salable 90,000 90,000 Financing Loan to Cost Interest Rate 60% 2.0% Land Loan $15,000,000 Warranty ($/unit) Sale Price ($/SF) 2,000 800 % Equity Invested % of Cash Flow Tier 1 Tier 2 Tier 3 0% 10% 30% Property Stats (Square Feet) Gross Site Area Deductions Net Site Area Density (FSR) FSR GBA Constr. GBA Net Salable Schedule Transaction Date Sales Start Construction Start Construction End # of Months % Sold at Commencement Units Sold/Month % Closed at Completion Units Closed Per Month Post # of Units Avg Unit Size Development Costs Purchase Financing & Costs Construction Loan Loan to Cost Max Loan Amount Equity Interest Rate Total S/Unit s /SF Land Loan Sales Assumptions - Land Building Costs Servicing Hard Contingency DCCs Consulting & Warranty Finance / Bank Costs - Other - Marketing Overhead Soft Contingency Development Costs Finance - Interest 50% Commissions TOTAL S Total S/Unit S/SF Sale Price Sales Comm. Warranty Net Proceeds Profit Outputs Project s /Unit SSF - Pre-Construction Spending ($/month) IRR Development Pro Forma ROE Peak Equity Profit Total S/Unit S/SF Development Sensitivity Gross Sales Less: 50% Commissions Less: Warranty Net Proceeds Partner IRR Sales Price Construction Land Hard Costs Soft Costs Profit Return on Sales Return on Costs