Question: 4 Suppose the NOI for a small property is expected to be $50000 for the first year. Financing will have an 11 percent interest rate

4 Suppose the NOI for a small property is expected to

4 Suppose the NOI for a small property is expected to be $50000 for the first year. Financing will have an 11 percent interest rate and will be amortized over 20 years with monthly payment. The investor expects to hold the property for five years with a 12 percent rate of return. The growth rate of NOI after 5 years is 1%. This terminal capitalization rate of the 6th year is 11%. (10marks) Please value the property according to the following data. 1 year | 2 | 3 | 4 | 5 | 6 Net Operating Income 57,964 50,000 41,667 51,500 41,667 53,045 41,667 54,636 41,667 56,275 41667 Debt Service

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Angela Mosley owns Innovative Designs. The trial balance of the firm for January 31, 20X1, the first month of operations, is shown below. INSTRUCTIONS 1. Complete the worksheet for the month. 2....

9. The NOI for a small-income property is expected to be $150,000 for the first year. Financing will be based on a 1.2 DCR applied to the first year NOI, will have a 10 percent interest rate and will...

The NOl for a small income property is expected to be $153,900 for the first year. Financing will be based on a 1.2 DCR applied to the first year NOl, will have a 10 percent interest rate, and will...

The NO / for a small income property is expected to be $150,300 for the first year. Financing will be based on a 1.2DCR applied to the first year NOl, will have a 10 percent interest rate, and will...

The NOI for a small income property is expected to be $153,300 for the first year. Financing will be based on a 1.2 DCR applied to the first year NOI, will have a 10 percent interest rate, and will...

The NOI for a small income property is expected to be $153,600 for the first year. Financing will be based on a 1.2 DCR applied to the first year NOI, will have a 10 percent interest rate, and will...

The NOI for a small income property is expected to be $151,500 for the first year. Financing will be based on a 1.2 DCR applied to the first year NOI, will have a 10 percent interest rate, and will...

The NOI for a small income property is expected to be $150,300 for the first year. Financing will be based on a 1.2 DCR applied to the first year NOI , will have a 10 percent interest rate, and will...

The Nol for a small income property is expected to be $152,700 for the first year. Financing will be based on a 1.2 DCR applied to the first year NOI, will have a 10 percent interest rate, and will...

How can La Bella Pizza make a larger economic profit with this range of prices than it could if it sold every pizza for $15? Use a graph to illustrate your answer.

Match each of the following cash receipt activities to the internal control principle to which it best relates. Enter the appropriate letter in the space provided. 1. A list of checks received in the...

Assume that your group is comparing the corporate bonds issued by COST and the corporate bonds issued by BBY as a potential debt investment. For both companies, their corporate bonds will mature in...

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".