All Forum Posts by: Zak Thompson

Yes you will want to take the LTV into account as lenders will limit funds based on a percentage of the after build value. Base on what I am hearing, if I'm understanding you correctly, you are estimating an after build stabilized value of $5.1M (at least after 5 years) and you are assuming a loan of $3.1M to cover cost of build which is basically 60% LTV of after build value and approximately 77.5% of cost. I don't know the dynamics or information of your deal but that should run under the lines of feasibility in most cases.

Assuming you refinance and pull cash out of the deal, you could essentially pull out your original investment and would increase your return I.E. reducing your investment in the deal.

James Storey, CCIM

Hey James,

Would I be able refinance right after the build is complete?

For example...using a 65% LTV and with an appraised value equal to 4.2mil...the loan amount would be 2.7mil. Should I be concerned there is a difference between the construction loan 3.1mil and that loan amount of 2.7mil?

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Hi BP Community,

I'm analyzing a my first CRE deal and I've built out a very dynamic model in order to run CF projections. The total build will be roughly $4 million (Equity = $900k and Debt = $3.1mil). The end goal is to sell or refi the building after 5 years for $5.1mil(what the model project based off future cash flows). However, I'm not factoring in a LTV ratio into the model. Do you think this is a critical piece to the puzzle and should I include it in the model?

Thanks in advance!

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Originally posted by @Greg Dickerson:

Originally posted by @Zak Thompson:

Hello, my project is calculating a monthly irr = 13.87% and an annual irr = 14.77%. Shouldn't these numbers equal?

IRR is return on investment over time. Its annualized not monthly calculation.

Hey Greg, thanks for clarifying this for me. This makes sense.

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Hello, my project is calculating a monthly irr = 13.87% and an annual irr = 14.77%. Can someone tell me if these two should equal the same value?

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Hello, my project is calculating a monthly irr = 13.87% and an annual irr = 14.77%. Shouldn't these numbers equal?

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All Forum Posts by: Zak Thompson

Zak Thompson has started 3 posts and replied 5 times.

Post: Loan to Value Ratio - Critical or Not

Post: Loan to Value Ratio - Critical or Not

Post: Monthly vs Annual IRR Calculation

Post: Monthly vs Annual IRR Calculation

Post: Monthly vs Annual IRR Calculation