Question
Joan and John purchase a building that generates a stabilized NOI of $900,000 and has a capitalization rate of 8%. It has been financed with
Joan and John purchase a building that generates a stabilized NOI of $900,000 and has a capitalization rate of 8%. It has been financed with a mortgage loan of $6,750,000 with a 5-year term, a 25-year amortization and an interest rate of 6%.
a) Calculate the Loan to Value (LTV)
b) Calculate the Debt Service Coverage (DSCR).
c) Calculate the loan balance at the end of one year.
d) If they sell the building at the end of the year for $12,000,000 what is their Return on Equity (ROE)?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Times Guide To The Financial Markets
Authors: Glen Arnold
1st Edition
0273730002, 978-0273730002
