REAL 4000 Test 3 LCPQ (calc only)

Assume you have taken out a partially amortizing loan for $325,000 that has a term of 7 years, but amortizes over 30 years. Calculate the balloon payment at maturity (Year 7) if the annual interest rate on this loan is 4.5%.

$282,835.42

Suppose that an income-producing property is expected to be purchased at a 15% overall cap rate, and expected to yield cash flows for the owner of $150,000 in each of the next five years, with cash flows being received at the end of each period. If the opportunity cost of investment (discount rate) is 7.00% annually and the property can be sold for $1,250,000 at the end of the fifth year, determine the value of the property today using the DCF approach.

$1,506,262

Assume the following for a floor in a multistory office building with a total usable area of 20,000 sq ft; a total common area of 5,000 sq ft; a total rentable area of 25,000 sq ft; and a tenant called "Highwoods Inc." that has a usable area: 4,000 sq ft and an annual flat rental rate of $25 per sq ft. How much total rent does Highwoods Inc pay per year at this property?

$125,000

Given the following information, calculate the equity dividend rate for this investment: first-year NOI: $18,750; before-tax cash flow: $11,440; acquisition price: $570,000; total equity portion of investment: 20% of acquisition price.

10.04%

Assume you take a first and second loan on a commercial property; both are interest-only loans with one financing 60% of the purchase price at a 5% interest rate, and the other financing 20% of the purchase price at a 15% interest rate. Positive leverage would be created in the first year if the property was purchased with expected returns equivalent to ________________

anything over a 6% going-in cap rate (unlevered IRR)

Suppose you are thinking about purchasing a small office building for $1,500,000. The 30 year fixed rate mortgage that you have arranged covers 80% of the purchase price and has an interest rate of 8%. Assume you were to default and go into foreclosure in year 10 of this loan. If the lender was able to sell this property for $700,000, how much does the lender stand to lose in the absence of PMI?

$352,696

If you look to rent a space in an office building that cost $25/sqft (full-service) and has: A total usable space for you (the tenant) of 2,000sqft A total usable area in the building of 25,000sqft A total common area in the building of 5,000sqft What is the total rent you will pay in the first month?

$5,000

Suppose you are looking to finance a property with a projected Year 1 NOI of $54,450 and a going-in (overall) cap rate of 7.00% that is used to determine value. The lender tells you that the maximum loan size will be the lesser of an 80% Loan-to-Value (LTV) or a 1.25 Debt Coverage Ratio (DCR). The other loan terms are as follows: amortization period of 30 years, annual interest rate of 6%, and monthly payments. What is the most this lender will lend you, given these restrictions?

$605,454

*Note, these are the same assumptions as the previous question* Assume the following for a floor in a multistory office building with a total usable area of 20,000 sq ft; a total common area of 5,000 sq ft; a total rentable area of 25,000 sq ft; and a tenant called "Highwoods Inc." that has a usable area: 4,000 sq ft and an annual flat rental rate of $25 per sq ft. What is the load factor for this property?

1.25

Given the following information, calculate the debt coverage ratio for this investment: potential gross income: $120,000; vacancy rate: 9%; net operating income: $60,000; operating expenses: $51,300; acquisition Price: $520,000; debt service: $40,000.

1.50

Suppose that examination of a pro forma reveals that the fifth-year net operating income (NOI) for an income-producing property that you are analyzing is forecasted to be $913,058 (you can assume that this cash flow occurs at the end of the year). If you estimate the projected NOI growth rate for the property to be 10% per year, determine the projected gross sales price (sales price) of the property at the end of year 5 if the going-out capitalization rate is 9.5%.

10,572,251

Given the following information, calculate the going-in capitalization rate for the specific property: first-year NOI: $19,000; acquisition price: $155,000; equity investment: 20%

12.26%

Given the following information, calculate the cash down payment (equity) required to purchase the specific property: purchase price: $500,000; loan amount: 75% of purchase price; up-front financing costs: 2.5% of loan amount.

134,375.00

Consider the table of projected NOI cash flows for a commercial real estate asset below. Year 1 $ 150,000 Year 2 $ 157,500 Year 3 $ 165,375 Year 4 $ 173,644 Year 5 $ 182,326 If the building is sold at the end of Year 3 at a 7.25% going-out cap rate, and 4.50% in selling expenses are incurred, what is the total cash flow (TCF) in year 3?

2,452,686

If a lender has agreed to offer you a loan with a loan-to-value ratio of 65%, what is the maximum projected size of the loan if your property's projected next year of NOI is $230,000 and an overall cap rate of 5.6% is used to find value?

2,669,643

Suppose your property produces an annual NOI of $50,000. You are looking at taking a mortgage loan with a 10-year term that is amortized over 30 years at a 6% interest rate. Payments would be due monthly. What is the maximum loan amount you can take if the lender requires a minimum DCR of 1.25?

555,972.04

Given the following information, calculate the debt yield ratio on the following commercial property: estimated net operating income in the first year: $210,000; loan amount: $2,800,000; purchase price: $3,700,000.

7.5%

Suppose that you are attempting to value an income-producing property using the direct capitalization approach. Using data from comparable properties, you have determined the overall capitalization rate to be 7.0%, a reasonable discount rate of 9%, and an exit cap rate of 12%. If the projected first-year net operating income (NOI) for the subject property is $135,500, If the projected second-year net operating income (NOI) for the subject property is $145,500, and the projected final-year total cash flow for the subject property is $1,155,500 what is the indicated value of the subject using direct capitalization?

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