Use the following information for Question 3 and 4 You bought the building, located at Little Ferry, NJ for $50 Million, which was 6 Capitalization Rate (CAP) This building is occupied only by Wal Mart You made 40 down and financed 60 of the purchase price at 5 APR, 5 year balloon with 25 year amortization schedule You have 25 year Absolute Triple Net lease with Wal Mart There is no annual escalation of the base rent The buildings $50 million value consists of $25 million land value and $25 million improvement In addition to $50 million purchase price, you had to pay 3 transaction (closing) costs (equivalently $1 5 million), which include the legal, financing, administrative, inspection, and all taxes Use 39 years for the annual depreciation Assume 30 tax rate 3) What is the return on investment for the first year Note Return on investment is defined as the net cash flows divided by the total investment, not including the financing 4) Assume that a couple has a combined income of $355,000, moderate existing debt, property and school taxes of $18,000 Homeowners insurance is $3,300 Determine the size of the mortgage that this couple can qualify for Please show all assumptions and the mortgage annuity solved by hand

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Use the following information for Question 3 and 4. You bought the building, located at Little Ferry, NJ for $50 Million, which was 6% Capitalization

Use the following information for Question 3 and 4.

You bought the building, located at Little Ferry, NJ for $50 Million, which was 6% Capitalization Rate (CAP). This building is occupied only by Wal-Mart.
You made 40% down and financed 60% of the purchase price at 5% APR, 5 year balloon with 25 year amortization schedule.
You have 25 year Absolute Triple Net lease with Wal-Mart. There is no annual escalation of the base rent.
The buildings $50 million value consists of $25 million land value and $25 million improvement.
In addition to $50 million purchase price, you had to pay 3% transaction (closing) costs (equivalently $1.5 million), which include the legal, financing, administrative, inspection, and all taxes.
Use 39 years for the annual depreciation.
Assume 30% tax rate.

3) What is the return on investment for the first year? Note: Return on investment is defined as the net cash flows divided by the total investment, not including the financing.

4) Assume that a couple has a combined income of $355,000, moderate existing debt, property and school taxes of $18,000. Homeowners insurance is $3,300. Determine the size of the mortgage that this couple can qualify for. Please show all assumptions and the mortgage annuity solved by hand.