Q$1|$

Suppose a property has an NOI of $$155,000$ and a debt service payment of $$100,000.$ What is the Debt

Coverage Ratio?

Q$2$

Suppose an appraiser estimates that a property's value is $$500,000$ and a borrower seeks a $$450,000$ loan, what

is the loan to value ratio?

Q$3$

Suppose a property has an annual NOI of $$100,000,$ a cap rate of $4\%,$ lenders are willing to make a loan with up

to $75\%$ LTV$,$ and a DCR of up to $1\mathrm{.}25.$ An investor is considering a $30-$year fully amortizing Fixed Rate

Mortgage, with at a $7\%$ annual interest rate, compounded annually, with annual payments. What is the

maximum loan this investor can get?

Q$4$

Suppose an investor buys a property for $$5,000,000.$ He uses a $75\%$ LTV loan. What is his initial equity

investment?

Q$5$

Suppose an investor buys a property for $$5,000,000.$ He uses a $75\%$ LTV loan, with an annual interest rate of

$7\mathrm{.}5\%,$ the loan is fully amortizing and has a $30$ vear term with monthly payments and with monthly

compounding. What is the annual debt service for this loan?

Q$6$

Suppose an investor buys a property for $$5,000,000.$ He uses a $75\%$ LTV loan, with an annual interest rate of

$7\mathrm{.}5\%,$ the loan is fully amortizing and has a $30$ vear term with monthly payments and with monthly

compounding. What is the remaining mortgage balance after $24$ months of payments?

Q$7$

If up$-$front financing costs on a $30-$year loan total $$10,000,$ what is the maximum amount that the investor can

deduct each year when calculating taxable income from rental operations?

Q$8$

If up$-$front financing costs on a $30-$year loan total $$10,000,$ if the loan is prepaid at the end of year $5,$ what is the

maximum amount that the investor can deduct that year when calculating taxable income from rental

operations?

Q$9$

You purchase an office building for $$5,000,000.$ What is the depreciation that you can deduct when estimating

your annual tax liability if $75\%$ of the purchase price is allocated to depreciable real property?

Q$10$

You purchase an apartment building for $$5,000,000.$ What is the depreciation that you can deduct when

estimating your annual tax liability if $75\%$ of the purchase price is allocated to depreciable real property?

Q$11$

You are offered a $7-$year lease at $$20\mathrm{.}00$ psf per year with $24$ months free rent and your discount rate is $9\%.$

What is the annual equivalent level rent?