Question
You are developing a 100,000 sqft industrial building. The bank is financing 60% of the total project cost, interest-only at 4%, while the balance is
You are developing a 100,000 sqft industrial building. The bank is financing 60% of the total project cost, interest-only at 4%, while the balance is funded by the MP. The draw schedule is as follows
July 2020: 2.0M
August 2020 - March 2021: $1.0M/month
The total budget is $10.0M
Assume the construction interest for a given month is equal to the monthly interest rate times the prior month outstanding balance plus current month draw, for example, October interest = monthly rate*(loan balance in September + October draw). The construction interest is accrued through June 30, 2021. What is the estimate of total construction interest paid by capital partners?
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Modern Financial Markets Prices, Yields, And Risk Analysis
Authors: Mark Griffiths, Drew Winters, David W Blackwell
1st Edition
0470000104, 9780470000106
