Question

Cash Flow Year 1 Stabilized Rent First Regional Bank Great Hair Clips Pet Supplies Tenant # 4 Tenant #5 Total Rent 28.00 /SF $ 50,400.0 $28.00 /SF 33,600.0 28.00 /SF 24.00 /SF 24.00 /SF $ 26.35 /SF $ 47,600.0 39,600.0 $ 39,600.0 210,800.0 CAM Charges 9.00 /SF 72,000.0 TOTAL REVENUE $35.35 /SF 282,800.0 Expense Utilities $ 0.69 /SF 5,500 CAM/Maintenance Insurance Real Estate Tax Management Fee $ 15,000 1.88 /SF O.65 /SF 5,200 $ $ 5.00 /SF 40,000 11,000 1.38 /SF 2.00 /SF Other 16,000 TOTAL EXPENSES 11.59 /SF 92,700 NET OPERATING INCOME $ $ 23.76 /SF 190,100.0 Supportable Loan Interest Rate Amortization Required DSCR Loan Amount 6.50% 25 Years 1.20 x $1,955,161

How do you solve for the loan amount shown in this picture?

Answer 1

Since we need to service the Loan Amount $1955161 with the following parameters,

Loan amount $1955161

Rate of Interest                                  6.5% Per annum /0.5417% per month

Tenure                                                25 Years/300 Months

Net operating Income $190100

Required DSCR                                 1.20x

To achieve the desired DSCR, we have converted the loan and interest payment in Equated Monthly Installments (using PMT Formula) keeping all other parameters same. The results are as follows:

Equated Monthly Installment                     $13201.39

No. of Installments in a year                      12

Total Payment in a year                 A)        $158416.70

Net operating Income per Year B) $190100

DSCR (B/A)                                                 1.20x