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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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