Property Assumptions:

Purchase Price: $4,000000

Year 1 PGI: $540,000

PGI Growth Rate (Annual): 3%

Annual Vacancy and Collection Loss (VCL): 10%

Year 1 Operating Expenses (OER): 35%

OPEX growth rate after first year 2%

Sales Price:

-Capitalize HP+1 NOI at 9% $3,895,042

Anticipated Holding Period: 3 Years

Maximum LTV: 70%

Interest Rate: 5%

Amortization Rate: 30 Years

Payments Per Year: 12

Investor Hurdle Rate (Unleveraged): 15%

1. What is the Loan Amount using the LTV Ratio?
2. What is the Initial Investment (Cash or Equity Investment)?
3. What is the Loan Balance at the end of 3 years?