Question
Consider a property with an expected Y1 NOI of $325,000.The bank is offering a loan based on a 2.1 DSCR at a rate of 3.25%.
Consider a property with an expected Y1 NOI of $325,000.The bank is offering a loan based on a 2.1 DSCR at a rate of 3.25%.
a.How much of a loan would the borrower qualify for assuming a 30-year amortization?
b. How much of a loan would the borrower qualify for, assuming the loan is interest-only?
c.Consider the interest-only loan you calculated in (b).How many points would the bank need to charge to achieve an 4.25% yield assuming repayment after 68 months? [Hint: be careful with the FV used in the final calculation and the sign on your PMT.]
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Fundamentals Of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
13th Edition
978-0134083308, 013408330X
