Question
Returns- Preferred, Cash on Cash, IRR, Equity Multiple Assume your investor requires a 6% preferred return and a 7 year hold. Also, assume an 80/20
Returns- Preferred, Cash on Cash, IRR, Equity Multiple
Assume your investor requires a 6% preferred return and a 7 year hold. Also, assume an 80/20 cash flow split after the pref. in favor of the investor. Use all of the above scenarios and described assumptions to model both the Fairfield and Columbus opportunities. Create separate models for each loan option too.
For each property, what is the best loan option for returning the highest returns to your investor? Why?
What are your income and expense trending assumptions for each property? Why?
What is your average cash on cash return to the investor over the hold period?
What is your exit cap rate for each property? Why? What is the IRR to the investor?
What is the investors equity multiple? Does your original value make sense in any of the scenarios? If yes, why? If not, why and what price does?
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