What is estimated IRR for this investment

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You wish to purchase an office building that has an asking price of $8,000,000. The projected NOI in year 1 is $400,000 and the NOI growth rate will be 1%. The going in cap rate and the terminal cap rate are both 8%. Your required rate of return is 10%. You plan for a 5 year holding period and will choose an interest only loan with a 90% LTV to finance your purchase. The interest rate on the loan will be 7%. What is the estimated IRR for this investment? (State your answer as a percentage, rounded to 2 decimal places. For example, if your answer is twelve and three quarters, enter 12.75.)

Reference no: EM131561380

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