Question

You are interested in purchasing a commercial property. You project that the property’s NOI nextyear will be $1,200,000. The current cap rate for similar properties is 8%. You are interested in acquiring a loan with a 30-year amortization term at a 6% annual interest rate. Based on the two metrics provided below calculate the loan amount. You must show all your calculations to receive full credit.

14. Given the following information calculate the property’s NOI [8 points] and BTCF [7 points]. You must show all your calculations to receive full credit.

Number of units = 20

Monthly rent per unit = $1,300

Vacancy rate = 7.5 percent

Depreciation = $50,000 per year

Annual operating expenses = $161,800

Annual Miscellaneous Income = $35,000

Annual Capital Expenditures = $32,000

Loan Amount = $2,000,000

Loan Terms = 30-year fully amortizing with monthly payments Loan
Interest Rate = 5.0%

Taxes Paid = $50,000

Answer #1

The loan amount is $15,000,000

NOI is $161,800

BTCF is $963

Workings:

You are interested in purchasing a commercial property. You
project that the property’s NOI next year will be $1,200,000. The
current cap rate for similar properties is 8%. You are interested
in acquiring a loan with a 30-year amortization term at a 6% annual
interest rate. Based on the two metrics provided below calculate
the loan amount. You must show all your calculations to receive
full credit. (a) LTV = 75% [8 points] (b) DCR = 1.35

You plan to purchase a property which has an expected NOI of
$200,000. You plan to borrow $1,500,000 at a 5% annual rate for 30
years. What is the DCR for this investment?
If the property in #9 is being purchased at an 8% cap rate,
assuming the same loan information what is the LTV for this
purchase?
show work

You are interested in purchasing an apartment complex for
$2,000,000 that has Net Operating Income (NOI) of $120,000 and is
financed with an 80% LTV mortgage at 4%
A. What is the Cap Rate?
B. What is the ROA?
C. What is the leverage ratio?

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Loss to Lease: $10k
Vacancy: $50k
Controllable Expenses: $300k
Non Controllable Expenses: $175k
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If Ann gets a 50% LTV loan for $500,000, what is her DSCR?

You borrow $75,000 for 30 years at 11% interest compounded
annually. The value of the property is $100,000, PGI= $20,000,
vacancy rates are 8%, and operating expenses are $8,100.
1. Calculate the mortgage constant.
2. Calculate the annual debt service.
3. Calculate the EGI, NOI, and BTCF
4. Calculate the overall capitalization rate, using the
band-of-investment approach.

You are considering the purchase of an apartment complex.
• Purchase price: $775,000
•BTCF:
Year
NOI
1
$103,085
2
$108,361
3
$113,875
4
$119,636
5
$125,651
•Holding period is four years
•Cap rate is expected to be 7% in year 4
•Selling expenses will be 5% of the sale price
•The 4-year Treasury bill rate is 3% and your risk premium for
this project is 8%
a) Calculate the NPV of this project assuming that you do not
take any...

A property has an expected first-year NOI of $1 million. Recent
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appraised value on a first mortgage. Say the mortgage interest rate
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years. (10 points) Hint: solve for the debt
service.
what is the implied loan...

A house is for sale for $640,000. You have a choice of two
30-year mortgage loans with monthly payments: Loan 1: Receive
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interest on the additional $50,000 borrowed on the first loan?

The price of a car you are interested in buying is
$93.45k. You negotiate a 6-year loan, with no money down
and no monthly payments during the first year. After the first
year, you will pay $1.23k per month for the following 5
years, with a balloon payment at the end to cover the remaining
principal on the loan. The annual percentage rate (APR) on the loan
with monthly compounding is 5%. What will be the amount of the
balloon...

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