2) Assume that you were given an opportunity to purchase a real estate project using an equity participation loan. The NOI for each year of the holding period are shown below. NOI Additional information: 1) 3) 4) 5) 6) 7) a. b. Year 1 124,787 Year 2 132,225 Purchase price = $1,900,000 Estimated value of land = $500,000 Calculate: Anticipated mortgage terms: a) Loan to value ratio= .80 b) Interest rate = 5.25% c) Years to maturity = 25 d) Points charged = 3 Year 3 139,954 e) Prepayment penalty = 2% of outstanding balance f) Level payment, fully amortized g) Fixed interest rate, monthly payments Participation terms: a) Share of NOI = 15.5% over $130,000 b) Share of Appreciation = 18% Future sales price = $2,350,000 Year 4 148,468 Estimated selling expenses as proportion of future sales price = 5% Client's minimum required before-tax rate of return on equity = 12% The before-tax cash flows and the before-tax equity reversion (you do not need to calculate the after-tax cash flows or reversion). The before-tax net present value to the investor.