Business Finance Homework Help

Part I:

Go to https://www.loopnet.com/, find a property for sale. You should be able to see the sale price of the property.

Suppose you need to borrow a mortgage of 80% of the sale price. Go to different bank websites to find a fixed rate loan option. Calculate your loan amortization table for first 12 months (Chapter 4), such as the following:

Question #1) If you only have the property for 5 years, what will be your mortgage outstanding balance?

Part II:

Go to https://www.loopnet.com/, find a property for lease. You should be able to see the lease rate of each unit in the property. Pick up one unit. Suppose you are the owner of this unit paying all expenses and interest rate is 10%.

Question #2) If the expenses are $5 in Year 1, increasing by $1/yr. thereafter, what is the effective net rent for the first 5 years?

Question #3) If the rent increases by $2/sq. ft. each year thereafter, and the expenses are $5 in Year 1, increasing by $1/yr. thereafter, what is the effective net rent for the first 5 years?

Question #4) If the rent increases by $2/sq. ft. each year thereafter, and the expenses are $5 in Year 1, increasing by $1/yr. thereafter. The expense stop is $7, what is the effective net rent for the first 5 years?