Reference no: EM132708349

Problem 1: Which of the below options would generally NOT be included in an offering memorandum?

a. Information about building operating systems (mechanical, age of equipment)

b. Market Overview and demand/supply factors

c. Cash Flow Projections

d. The reason that the current owner wants to sell

e. Rent Roll

Problem 2: What are TWO reasons why an investor would take out a mezzanine loan?

a. They do not have the capital to complete transaction

b. To achieve a lower DSCR

c. They are trying to reduce their overall cost of capital.

d. To involve more parties in the transaction

e. They would like to include a earn out for construction funding.

Problem 3: Which of the below would be a reason to include a capital program in your underwriting?

a. To achieve construction management fees

b. To achieve higher rents and improve the overall quality of the property

c. To achieve a higher cap rate on your exit

d. To lower your cost of capital

Problem 4: Why would a borrower look for floating rate financing as opposed to fixed rate financing?

a. To utilize treasury bills as an index rather than LIBOR

b. They want to avoid high fees associated with the loan

c. They want security against interest rate risk

d. They want flexibility of prepayment timing to match their hold period