Real estate debt markets Assignment Example | Topics and Well Written Essays - 2250 words

Real estate debt markets - Assignment Example The original plan of the buyers was to refurbish and add more size to the building convert it in a building with several places of renting. For this property, potential investors acted first to buy it which today is 26% let. There is a cash flow excel sheet showing a holding period of 5 years starting with an investment of $76 million the first year of purchasing the property and making installments of about $ 67,000 annually. The loan plan used in pricing in relation to the document is in installments as the building is too expensive to purchase a block the first time. The point here is that, there are to be small premiums. These premiums are about the size that the banks want to buy the property. The total loan amount is $17,230,802 in order to purchase the building with a maturity date of 30/11/2014. The interest was at three months with 350 bps. The maximum price to get the loan is $17,230,802. In order to get the $76 needed, the will have to installments made to purchase the bui lding. The strategy employed is that of getting all the investors to on the investor’s committee to understand the value of buying the mezzanine loans, as this would help the investors to purchase the building. The building should have returns to give encouragement to the lenders, Danske. The project had several recommendations and conclusions such always waiting for the right time in order to get the loans among the others. In addition, the purchase of the loan itself is to under installment process and not paying at once. The investors should participate by doing a fact-finding survey of the property and loans to see if they are worth undertaking. The final decision on taking the loan is on principle of business and investment as whether to make such a mega loan. The property needs evaluations to see if it is in the standard class. Such a type attracts quality tenants. The