Calculate year 1 cash flows, 

initial equity investment and these ratios: Going-in Cap rate, Cash-on-cash, EGIM, OER, DCR, and DYR. 

Is the project able to receive financing? Explain why it is either able to or not able to be financed.

Information

Purchase Price: $11,400,000

Year 1 PGI: $1,500,000

Projected PGI annual growth: 3.5%

Annual Vacancy & Loss: 5%

Year 1 OpEx: $450,000

Projected OpEx annual growth: 3%

Capital Expenditure: 5% of EGI

Loan Information:

               LTV: 65%

               Minimum DSCR: 1.35

Minimum DYR: 9.5%

               Interest Rate: 6.25%

               Amortization Period: 20 years

               Loan Term: 20 years

               Loan Costs: 1.5% of loan

 

Answer rating: 100% (QA)

To calculate the year 1 cash flows and the various ratios well need to gather some information and perform the necessary calculations Lets go step by ... View the full answer