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Updated over 4 years ago,
Underwriting assumptions Refi in 5 years I/O terms
Currently looking at an investment as an LP and the sponsor is assuming a refi at the end of year 5 with a I/O term of 36 months.
To me this feels like they are doing that to juice the returns in the pro forma and errs on the side of being too aggressive. But I also am not an expert in I/O lengths lenders have given in recent history (last 10-15 years)
Do you feel the 36 months of I/O in five years is realistic or aggressive?
Knowing that is a loaded question, can anyone share insight as to what the historical I/O term lengths for agency and conduit lenders?