What is the purchase price for this asset

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Reference no: EM132965350

Question - You can purchase the asset at a 5% going in cap rate. You plan to sell it in 3 years and believe that you will be able to sell it a 5% cap rate as well. You plan to use 60% LTV for the purchase. The loan will be interest only at a 4% annual interest rate.

Required - Answer the following:

1. What is the purchase price for this asset?

2. What is your initial equity investment?

3. How much is the annual mortgage payment?

4. What is the loan balance at the end of year 3?

5. What is your expected levered IRR?

Reference no: EM132965350

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