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RES 3200 Homework 6 Questions




Question;Note: The information presented here applies to questions 1 through 5:You are thinking about purchasing a small office building in Queens. The property contains 10,000 square fee of rentable space and is currently occupied by a single tenant with three years remaining on their lease. If the annual rent in the first year of your tenure as owner $30 per square foot and expenses are estimated to be 45% of effective gross income, what is the net operating income generated by the property in the first year of ownership?1 pointsQuestion 2A lender offers to provide a mortgage to finance part of the acquisition of the property in the form of a 5-year interest-only loan with a 6.25% rate. What is the most the lender is willing to provide if they require a minimum debt coverage ratio equal to 1.2?1 pointsQuestion 3The asking price for the property is $3,000,000 and the lender permits a maximum loan-to-value ratio of 70%, what is the most you can borrow by this criterion?1 pointsQuestion 4If the lender requires both a minimum debt coverage ratio of 1.2 and a maximum LTV ratio of.70, what is the maximum amount you are qualified to borrow?1 pointsQuestion 5If you decide to purchase the property for the asking price, what is the corresponding capitalization rate?


Paper#47973 | Written in 18-Jul-2015

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