Recommended
More Related Content
What's hot
What's hot (18)
Viewers also liked
Viewers also liked (20)
Similar to 374 10
Similar to 374 10 (20)
More from Gale Pooley
More from Gale Pooley (20)
Recently uploaded
Recently uploaded (20)
374 10
- 3. What would you rather have? 1,000 in 5 years or 2,000 in 10 years?
- 4. What would you rather have? Depends on the discount rate Years FV 10% 20% 5 1,000 620.92 401.88 10 2,000 771.09 323.01
- 5. Five Characteristics payment amount & frequency loan balance lender’s yield (IRR) effective borrowing cost present value of the debt
- 6. Loan Balance calculate the present value of the remaining payments
- 7. Loan Balance 100,000 at 30 years at 10% PMT 10,607 After 10 years? 20 years at 10% at 10,607 PV 90,303
- 8. LenderYield (IRR) 100,000 at 30 years at 10% PMT 10,607 Points 5,000 95,000 at 30 years at 10,607 i = 10.63%
- 10. Commercial vs. Residential more risk shorter terms higher down LTV non-recourse
- 12. The Note payment amount and timing penalties for late payments insurance maintenance default
- 13. Interest Only pay only interest pay principal balance at maturity “bullet loan”
- 14. Balloon Mortgage amortize over 25-30 years maturity 5-15 years must be prepared to payoff loan at maturity
- 15. Ratios LTV - loan to value ratio loan ÷ value DCR - debt coverage ratio NOI ÷ debt service
- 16. DCR 1.3 to 1.5 how much NOI is there available to make the debt payment? cushion to cover
- 18. Yield Analysis How can you improve yield? Leverage
- 19. Leverage Using other people’s money to make more money on my money.
- 20. Leverage
- 21. Leverage
- 22. Leverage
- 24. Two Elements Equity - owner Debt - lender
- 25. Yield Analysis Purchase Price 1,000,000 NOI 100,000 Overall Rate 10.0% Loan 750,000 Years 30 Rate 8.0% Payment 66,621
- 26. Yield Analysis Debt 750,000 66,621 8.9% Equity 250,000 33,379 13.4% Total 1,000,000 100,000 10.0% Value NOI Rate
- 28. Effective Gross Income Multiplier Price ÷ EGI
- 30. Report Hints Cost Approach Neighborhood Land Rates - C21 Building Rates Office Retail
- 31. Construction Rates Per Square Meter Retail - one level: 1,000 - 1,400 Retail - 2+ levels: 1,200 - 1,800 Office: 1,500 - 1,800 Source:Altaweed Appraisal