Refinancing Apartment Complex

[Jesse Daconta]

We currently have a 20 unit apartment building under contract in Norfolk, VA. We're going to refinance out in ~3 years. Does anyone know how a bank comes up with the value of the building? Is it the same as when you're trying to sell it (NOI and cap rate) or do they factor in other things as well?

Thank you,

Jesse

[Danny Randazzo]

@Jesse Daconta they use the same cap rate and noi formula to calculate future value. The bank will have their own noi adjustments that might be different than yours but talk to them about it. Also, banks build debt around dscr so make sure you know how that works too!