Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

oan on Real Estate. property that has recently been valued at $5,000,000 has an NOI of $500,000. A real estate lender is willing to nake

image text in transcribed

oan on Real Estate. property that has recently been valued at $5,000,000 has an NOI of $500,000. A real estate lender is willing to nake a 9.5% interest-only loan as long as the LTV ratio does not exceed 70% and the DSCR is at least 1.25. a. Calculate the maximum loan amount. $ Round your answer to the nearest dollar. b. Calculate the equity dividend rate given that the property is purchased at its appraised value. % Round your answer to two decimals. C. If the property is sold after 5 years for $6,250,000, calculate the IRR that the equity investor will earn on her investment. % Round your answer to two decimals. d. Calculate the unleveraged IRR, i.e., if the property were purchased on an all-cash basis. % Round your answer to two decimals

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Enterprise Risk Management Todays Leading Research And Best Practices For Tomorrows Executives

Authors: John R. S. Fraser, Rob Quail, Betty Simkins

1st Edition

1119741483, 978-1119741480

More Books

Students also viewed these Finance questions