Question
Nitros Office Park Property Assumptions: Purchase price: $5,450,000 Acquisition costs: $150,000 Year one potential rental income: $765,000 Vacancy and credit losses: 7 percent Other income:
Nitros Office Park Property Assumptions: Purchase price: $5,450,000 Acquisition costs: $150,000 Year one potential rental income: $765,000 Vacancy and credit losses: 7 percent Other income: $29,000 Year one operating expenses: $310,000 Financing Assumptions: Loan amount: the loan will be the lesser of the amounts calculated using LTV ratio and DSCR and rounded down to the nearest thousand Maximum LTV ratio: 65 percent Minimum DSCR: 1.36 Minimum DYR 9.85% Interest rate: 5.45 percent Amortization period: 20 years Loan term: 7 years Loan costs o Lenders discount points: 1.3 percent of loan amount o Third party costs: $25,000 Given this information calculated your year 1 cash flows, initial equity investment and the following ratios: Goingin Cap rate, Cashoncash, EGIM, OER, DCR, and DYR. Is the project able to receive financing? Explain why it is either able to or not able to be financed. In Excel
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