Question
Use the given information to solve the following questions. You have purchased a building for $12,000,000. There are ongoing NNN leases that will create a
Use the given information to solve the following questions. You have purchased a building for $12,000,000. There are ongoing NNN leases that will create a constant annual PGI of 1,700,000 with a Vacancy and Collection loss of 10%. Operating Expenses will be constant at 575,000 per year, and Capital Expenditures a constant 120,000 per year. You have obtained a 5-year, 4.5% partially amortizing loan at 65%LTV with 1.5 points that has a 25-year amortization period. You expect to sell this building for a net of $14,500,000 (i.e. after selling expense are paid) five years from today. What is your loan amount? What is your initial investment? What is your monthly loan payment? What is your loan balance after 5 years? What is your ADS? What is your year 1 NOI? What is your Year 1 before tax cash flow from operations? What is your going in cap rate? What is the first year cash on cash return for this investment? What is the first year Debt Coverage Ratio for this loan? What is the first year Debt Yield for this loan? What is the first year Break Even Occupancy for this loan? What is your before tax cash flow from selling this building? What is the before tax IRR of this investment? For a 14% equity hurdle rate, what is the before tax NPV of this investment? If your lender was satisfied with a 1.5 Debt Coverage Ratio (regardless of LTV), what is the maximum loan amount you could have obtained?
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