Question 15 10 pts In the property described in Question #14, assume the permanent loan repays the amount of the construction loan plus 25% of the original equity invested in the project. The permanent loan interest rate is 4.50% and the amortization is 25 years. Complete the table below and show how you calculated the answer. construction loan repayment original cash equity permanent loan amount permanent loan debt service cash equity after refinancing return on equity after refinancing Loan Amount = $10,000,000 Loan Drawn year 1( $10mm*70%* 40% ) = $2.8 mm Accrued Interest Year 1 ( $2.8mm*5%) = $.014mm Loan Drawn Year 2 ($10mm*70* 60%) = $4.2mm Accrued Interest Year 2 ( $4.2*5%) = $0.21mm Loan Balanced Year end 2 = $10mm - $7mm = $3mm Caprate to repay loan ( NOI/Property value) *100 = $700000/10,000,000 *100 = 7% Cap rate to repay total cost + 15% gross profit margin = $10*70%*7% + $0.07mm*15% = &0.0595mm or $595000 Question 14 10 pts A construction loan funds 70% of costs for a $10 mm project, plus interest accruing at 5%/year for 2 years. The loan draw is 40% in yr 1 and 60% in yr 2. The pro-forma NOI IS $700,000. Complete this table and show how you answered the question. loan amount loan draw year 1 accrued interest year 1 loan draw year 2 accrued interest year 2 loan balance end of year 2 cap rate to repay loan cap rate to repay total costs + 15% gross profit margin Question 15 10 pts In the property described in Question #14, assume the permanent loan repays the amount of the construction loan plus 25% of the original equity invested in the project. The permanent loan interest rate is 4.50% and the amortization is 25 years. Complete the table below and show how you calculated the answer. construction loan repayment original cash equity permanent loan amount permanent loan debt service cash equity after refinancing return on equity after refinancing Loan Amount = $10,000,000 Loan Drawn year 1( $10mm*70%* 40% ) = $2.8 mm Accrued Interest Year 1 ( $2.8mm*5%) = $.014mm Loan Drawn Year 2 ($10mm*70* 60%) = $4.2mm Accrued Interest Year 2 ( $4.2*5%) = $0.21mm Loan Balanced Year end 2 = $10mm - $7mm = $3mm Caprate to repay loan ( NOI/Property value) *100 = $700000/10,000,000 *100 = 7% Cap rate to repay total cost + 15% gross profit margin = $10*70%*7% + $0.07mm*15% = &0.0595mm or $595000 Question 14 10 pts A construction loan funds 70% of costs for a $10 mm project, plus interest accruing at 5%/year for 2 years. The loan draw is 40% in yr 1 and 60% in yr 2. The pro-forma NOI IS $700,000. Complete this table and show how you answered the question. loan amount loan draw year 1 accrued interest year 1 loan draw year 2 accrued interest year 2 loan balance end of year 2 cap rate to repay loan cap rate to repay total costs + 15% gross profit margin
