Consider the following:

• Purchase Price: $800,000
• Total bank financing: 90%
• Total institutional equity: 80%

Calculate:

1. Total amount of bank financing $720,000
2. Total amount of institutional equity $64,000
3. Total amount of investor's share (remember that the total of a, b, and c need to equal the purchase price) $16,000
4. Investor's percentage of total purchase price 2.0%

So the Question that needs answering is:

Why would this be attractive to an investor (i.e. what does this enable them to do)?