Questions – Page 6 – Real Estate Financial Modeling

Question 6. of 15.) A property is purchased in cash for $100,000. The asset will be held for 4 years. The investor has projected the project cash flow as follows: Year 0, -100,000; Year 1,-1,000; Year 2, 19,000; Year 3, 21,000; Year 4, 210,000. What is the IRR?

Real Estate Financial Modeling / Questions / Page 6

Question 6. of 15.) A property is purchased in cash for $100,000. The asset will be held for 4 years. The investor has projected the project cash flow as follows: Year 0, -100,000; Year 1,-1,000; Year 2, 19,000; Year 3, 21,000; Year 4, 210,000. What is the IRR?

August 23, 2017
Mckenzie Jones

Question 5. of 15.) If the annual nominal rate for a interest-only loan is 6.25% and it is compounded quarterly, what is the effective annual rate?

August 23, 2017
Mckenzie Jones

Question 4. of 15.) A construction loan charges 9% simple interest. A $100,000 amount is drawn by the borrower at Time 0. If that is the only amount drawn, and it is returned 90 days later, what is the amount of interest accrued during that borrowing period? Assume that the interest is calculated on a 360-day basis.

August 23, 2017
Mckenzie Jones

Question 3. of 15.) An $85,000 loan with a 30-year amortization term is issued at rate of 9.75%. There are 21 years and $67,300 remaining on the balance. The monthly payment amount is $730.28. If the lender requires a balloon payment on the loan at the end of 10 years, what would the value of the balloon payment be? Hint: What is the balloon payments future value?

August 23, 2017
Mckenzie Jones

Question 2. of 15.) An $85,000 loan with a 30-year amortization term is issued at rate of 9.75%. There are 21 years and $67,300 remaining on the balance. What is the current monthly payment amount?

August 23, 2017
Mckenzie Jones

Question 1. of 15.) You have an opportunity to purchase a rental property with an amortizing loan that charges 10% annually, and which has a 30-year amortization term. The maximum monthly payment that you are able to afford is $770. If you are able to make a down payment of $18,900, what is the maximum price that you can afford to pay for the property? Hint: Calculate the property’s present value given the restrictions that you have.

August 23, 2017
Mckenzie Jones

A fund invests $1,000, split 10% from the Sponsor and 90% from the Investor. The annual cash flow at the fund level is $200 for three years. The properties are operated and sold in Year 4, generating Year 4 cash flow of $1,500. What Year 4 cash flow to the Investor is required for the Investor to achieve a 12% IRR?

July 3, 2017
Mckenzie Jones

If there are three equity players, and the local developer Sponsor gets promoted twice, assuming at least one of the promote hurdles is achieved in each waterfall, the developer Sponsor’s IRR will be the _______ of the three parties.

July 3, 2017
Mckenzie Jones

What is the correct formula for the first period of the Tier 2 IRR Check (line 92)?

July 3, 2017
Mckenzie Jones

Building on the work you completed for the prior question, what is the TIER 3 Year 4 Investor Cash Flow? SAVE YOUR EXCEL WORK TO ASSIST WITH THE NEXT QUESTION

July 3, 2017
Mckenzie Jones

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