You have two properties to refinance. Property A is an office building that generates $325,000 in...

You have two properties to refinance. Property A is an office building that generates $325,000 in NOI and is worth $5,000,000. Property B is a warehouse that generates $425,000 in NOI and is worth $7,000,000. You are approaching a lender to see what can be offered on both. On the Office building, the loan amount will be the lesser of a LTV of 75% or a 1.30X DSCR, 4.00% fixed, and 25-year schedule. On the Warehouse building, the loan amount will be the lesser of a LTV of 75% or a 1.30X DSCR, 4.00% fixed, and 30-year schedule. What are the loan amounts for each property?

Solutions

Expert Solution

LTV of Property A= $5000, 000*75% = 3750,000

DSCR of Property A = Net operating Income/ Total debt service

1.3 = 325000/Total debt service

Total Debt service = 250,000

LTV of Property B = $ 7000,000* 75% = $5250, 000

DSCR of Property B = 425000/Total debt service

1.3 = 425000/ Total debt service

Total debt service = 326,093

ekkarill92 answered 1 year ago

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