What is the estimated maximum annual debt service

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If a lender feels that $950,000 is a reasonable estimate of a property’s first year NOI and has a lending policy of a minimum debt service coverage of 1.25, (a) what is the estimated maximum annual debt service? (b) If the loan is a fixed rate loan priced at 8.5% per year, fully amortized for 25 years, what is the estimated maximum loan? (c) if cap rates are 10%, what is the estimated value of the property? (d) if the lender has a loan to value criterion of 80%, what would be the actual loan amount? (e) if the NOI given above is growing at a constant rate of 3.5% per year, and an investor has a holding period of 5 years and a required rate of return of 20%, what is the most she should pay for this property?

Reference no: EM131352319

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