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Orlando Investments is buying an office building in Orlando, FL. Building's asking price: $2,000,000. The company is planning to accept the asking price and take

Orlando Investments is buying an office building in Orlando, FL.

  • Building's asking price: $2,000,000.
  • The company is planning to accept the asking price and take a loan with an LTV of 72%.
  • The company is estimating the first year's net operating income to be $250,000.
  • The lender is willing to offer an accrual loan to the investor, with a 14% annual accrual rate.
  • The lender requires a 1.40 first year's debt coverage ratio.
  • The lender also requires that the payments on the loan are made monthly.
  • The lender also requires that the 2nd year's loan payment is 10% higher than the 1st year's loan payment.

Fill in the missing numbers! Round to whole dollar. Put negative signs, where necessary. Do NOT put the $ sign. As always, in order to avoid rounding errors it might be best to build this table in Excel and use correct cell referencing.

Year 1 Year 2
Beginning loan balance 1,440,000 1,464,565
Total loan payment 10% higher than Year 1's loan payment
Interest payment 203,137
Principal payment -24,565 -9,185
Ending loan balance

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