1 . You invested $500,000 of cash equity to purchase a property and borrowed $1,000,000. You sell the property 1 year later for $1,750,000. 

Assuming no BTCF, what is your total annual return?

If the same property had BTCF of $50,000, what is your total annual return? 

If the same property had an NOI of $100,000 and ADS (annual debt service) of $75,000, what is your total annual return?

 

2. A lender says its LTV is 50% for a property you are considering. You need a loan amount of $1,500,000, what must be the appraised value to qualify for the full loan amount?  If the $1,500,000 is paid interest only at 7.0%, what is the annual amount of debt service (the amount you must pay the lender)? 

 If the $1,500,000 is to be repaid 7.0% with loan principal amortized over 20 years, what is the annual debt service? 

If the property's underwriting (stabilized year 1) NOI is $153,300, find DSCR?

Does this meet a minimum 1.25x DSCR? 

If the lender requires a 1.45x DSCR, what must the NOI be to qualify? 

What is the amount owed to the lender if you sell the property at the end of year 3? 

 

3. A lender's underwriting criteria requires a minimum of a 1.50x Debt Service Coverage Ratio to qualify for a loan. You have requested a loan amount that the lender estimates will have $300,000 of Annual Debt Service (i.e., annual loan payments). For your investment property to qualify for the loan, what must the property's annual NOI (Net Operating Income) be equal to? 

 

4. What size loan will produce ANNUAL DEBT SERVICE (ADS) of $75,000 with a loan amortizing principal over 15 years at an interest rate of 6.0%? 

 

5. You have negotiated to buy a property for $4,000,000 that has an annual NOI of $250,000 in year 1, $265,000 in year 2, and $280,000 in year 3. 

You apply for a loan with a lender who says the loan amount must size based on a maximum 70% LTV and a minimum 1.25x DSCR. The lender quotes an interest rate of 2.00% over the 10-year Treasury, which is 4.85% today. The lender will amortize the loan principal at 25-years. 

Size this loan based on Year 1 NOI and the purchase price (assumed value). What is the maximum loan amount?

Answer rating: 100% (QA)

Here are the answers 1 You invested 500000 of cash equity to purchase a property and borrowed 1000000 You sell the property 1 year later for 1750000 Assuming no BTCF what is your total annual return T... View the full answer