a property is expected to have Net Operating Income of $100,…

a property is expected to have Net Operating Income of $100,000 in the first year. The NOI is expected to increase by 5% each year thereafter. The appraised value of the property is currently $1.25 Million and the lender is willing to make a $1,125,000 participation loan with a contract interest rate of 5.5%. The loan will be amortized with monthly payments over a 20 year life. In addition to the regular mortgage payments, the lender will receive 50% of the NOI In EXCESS of $100,000each year until the loan is repaid. The lender will also receive 50% of any increase in the value of the property.  Assume that the appraiser will estimate the value of the property in Year 3 by dividing the NOI of year 4 by an 8 percent Cap Rate. Calculate the cost to the borrower (which is also the cost to the lender) if the property is held for 3 years.  

Answer 5 of these 8 questions (For questions 21-28 write SKI…

Answer 5 of these 8 questions (For questions 21-28 write SKIP for the 3 you do not want me to grade).     What is meant by a participation loan?  What does the lender participate in?  Why would a lender want to make a     participation loan?  Why would an investor want to obtain a participation loan?

Answer 5 of these 8 questions (For questions 21-28 write SKI…

Answer 5 of these 8 questions (For questions 21-28 write SKIP for the 3 you do not want me to grade).    A.  When do you graduate? B.  In what ways do you think that this course will be useful to your in the future personally and professionally? C. What did you like most about the course?   D. What suggestions do you have for me when I teach this class next year?   E.  How many of the zoom meetings did you attend, and how many did you watch?  Were they useful to you?