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What is the return on equity for the owner

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Question - An investor has obtained a corporate loan with an LTV of 64% for the purchase of a property. The initial loan amount is $2,200,000 with monthly payments on a 5 year term, 25 year amortization and an interest rate of 4.5%. The property generates a stabilized NOI of $300,000 and is expected to remain the same for the next 5 years.

Required - What is the return on equity for the owner if they sell the property for 4,000,000 at the end of year 3?

Reference no: EM133121123

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