Question
#of apartments = 20 units Monthly rent= 2500 Rental Growth rate= 4.0 per year Expense ratio= 53% of rental revenue Miscellaneous income= 12,000 per year
#of apartments = 20 units
Monthly rent= 2500
Rental Growth rate= 4.0 per year
Expense ratio= 53% of rental revenue
Miscellaneous income= 12,000 per year
Miscellaneous Growth rate= 2% per year
Going in cap= 5.75% per year
Going out cap= 6.0% per year
Holding period= 5. Years
Assume an interest only loan at 6% and the following underwriting constraints.
What is the maximum amount that will be lent?
Max loan to value= 75%
Max debt service coverage ratio- 1.35
Min Debt Yield= 7%
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
