Assignment $1$

For this assignment, you will use the provided information, as well as what you have learned from class lectures and

the reading, to analyze several loan opportunities, then answer questions to demonstrate your understanding of the

analysis you performed.

The goal of this assignment is for you to use your decision$-$making and analytical skills like you would in the

workplace and to articulate your responses in a professional manner, like you would to a client.

The scenario

Your client, a partnership consisting of a group of three investors,

wants to refinance a property they own, Wyndham on Delaware in the

St Joseph neighbor of Downtown Indianapolis. Wyndham on Delaware

is a $37-$unit apartment building constructed in the $1929.$ It was fully

gutted and rehabbed in $2016/2017.$ The property is $97\%$ occupied and

recently appraised for $$225,000$ per unit. Current NOI is $$611,000.$

Your client has $35\%$ equity in place but is willing to bring more to the

closing table if the deal makes sense. However, if they can pull cash

out of this deal on the refinance, that would help them with their plan to

acquire an additional property.

Your client has qualified for the following loan programs$/$terms$.$ All

loans use monthly compounding.

Review each loan option, and calculate the following for each loan in the assignment spreadsheet:

a$)$ Loan amount based on LTV ratio

b$)$ Loan amount using max ADS formula based on required DCR

c$)$ ADS $($Annual debt service$)$ for lower of loan amounts from steps a and b$.$

d$)$ Loan payoff at the end of the loan term

e$)$ Principal paid over the loan term

f$)$ Interest paid over the loan term

g$)$ Actual DCR

h$)$ Actual debt yield

i$)$ Effective borrowing cost $($considering early payoff as appropriate