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Real estate finance homework cash-on-cash return and cap rates?


I am trying to calculate some financials based on a multifamily development. I am confused on how to calculate the cash-on-cash return. The annual debt service is $1,004,000 on a $10 million loan @ 8% 20 year amortization. I am not looking for a straight up answer, but some explanation on how to find it would be nice. I have some other info, but it doesn't seem like I have what I need.

I am also needing to find a development profit based on a sale completion with an 8% capitalization rate.

I also need to calculate a loan-to-value ration, but I think I can figure that one out.

Try figuring out your annual gross income.
Subtract All expenses and Debt Service.
This is your cashflow.

Cashflow divided by the money you actual put in is your cash on cash return.

Say your Gross income is 1.8 Mil
Minus Debt Service of 1 Mil
Minus Expenses of 500 Thous
Equal Cashflow of 300 Thous
Divided by an initial Cash Outlay of 200 Thous
Equals a CCR of 15%

Hope this helps...

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