Question
Consider a property with the following property level cash flows: NOI Cash Flow Y1 $100,000 $88,000 Y2 $102,000 $90,000 Y3 $104,040 $92,040 Y4 $106,121 $94,121
Consider a property with the following property level cash flows:
NOI | Cash Flow | |
Y1 | $100,000 | $88,000 |
Y2 | $102,000 | $90,000 |
Y3 | $104,040 | $92,040 |
Y4 | $106,121 | $94,121 |
Y5 | $108,243 | $96,243 |
1. Assuming a sale at the end of Y3, the residual cap rate will be applied to what value?
2. Assuming an initial purchase price of $2.0M, what is the Y2 NOI return?
3. Assuming an initial purchase price of $2.0M, what is the Year 1 COC return?
4. Assuming an initial purchase price of $2.0M, what is the 5 year average NOI return?
5. Assuming a $2.0M initial purchase price and a 60% LTV interest only loan with a rate of 4%, what is the 3-Year average (levered) COC return?
6. Assuming a $2.0M initial purchase price and a 60% LTV interest only loan with a rate of 4%, what is the 3-Year UNLEVERED IRR assuming no sales costs and gross proceeds from sale of $2.3M?
7. Assuming a $2.0M initial purchase price and a 60% LTV interest only loan with a rate of 4%, what is the 3-Year LEVERED IRR assuming no sales costs and gross proceeds from sale of $2.3M?
8. Assuming a $2.0M initial purchase price and a 60% LTV interest only loan with a rate of 4%, what is the 3-Year UNLEVERED Equity Multiple assuming no sales costs and gross proceeds from sale of $2.3M?
9. What is the Property Value based on a 3-Year required UNLEVERED IRR of 11% and assuming no sales costs and gross proceeds from sale of $2.3M?
10. What is the residual/terminal cap rate based on $2.3M in gross proceeds for a 3-Year hold?
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