Question
You are a high-flying banker making waves in the world of finance in Cape Town. You're a roller. All your money goes on fancy restaurants
You are a high-flying banker making waves in the world of finance in Cape Town. You're a roller. All your money goes on fancy restaurants and wineries.
Your speciality is lending to real estate investors. Rather conveniently (for this example), an investor has come to you asking to borrow R100m. They will use this money to buy a property that generates R15m in net income each year.
If you want to be repaid in 10 years, and you are going to charge a 12% interest rate, how much more money will the borrower need to pay each year above the rent to make the annual payment to you?
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