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SET-UP You own a construction and real estate company. You are building a new office build

SET-UP You own a construction and real estate company. You are building a new office build

SET-UP You own a construction and real estate company. You are building a new office building. The cost of the building is going to be $6,000,000. Your down payment is $250,000. Your bank gave you an interest rate of 4%, compounded monthly. The answers for some questions will be used as inputs for other questions Question 1 What is your monthly payment for a 30 year mortgage? Question 2 There will be 40 units in the building, of which four will have a conference room making them 25% larger than the other units will. What is the rent that you need to charge per unit (office & office with conference room) to make your mortgage payment? The larger units rent must be proportional to their size Question 3 what is the rent you need to charge for the different units if you want a 50% monthly profit. Question 4 You decide that if you sell some of the units, you are willing to make a profit of 25%, what would be the price (If you sold all the units) of each unit? Question 5 You are able to finance the sale of the units using the price from question 4, and give your buyers a loan with 6% interest, compounded monthly. what is the payment the buyers will have depending on the type of unit if they need to pay you back in 20 years? Question 6 If you require 10% downpayment, what will be the payment for the buyers given the parameters of question 5. Question 7 After five years, you find out you need to retrofit the building to meet new energy standards. The retrofit will cost $750,000, determine the new rent you will charge in order to cover the retrofit and breakeven assuming no units were sold

Abhinav 04-Dec-2019

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