16 - Permanent | Take Out Loan

Summary

  • :pushpin: Explanation of Permanent Loan Takeout:
    • A permanent loan takeout pays off a construction loan after project completion, including the capitalized interest accumulated during construction.
    • The total loan amount is based on project costs plus interest.
  • :bar_chart: Stabilized Financial Metrics:
    • Key values such as stabilized Net Operating Income (NOI), cap rate, and total construction debt impact the permanent loan’s calculation.
    • The reporting system shows projections and alerts when sections lack input values.
  • :wrench: Construction Loan Details:
    • Construction costs, unit details (residential, commercial), and cash flow timelines need accurate input to calculate totals effectively.
    • Land acquisition is often the first value entered, with other costs added progressively.
  • :chart_with_upwards_trend: Loan Dynamics:
    • Details about how interest rates (fixed or variable) and gaps in input cells default to annual rates to ensure consistent calculations.
    • Exit fees are calculated only when applicable to a remaining loan balance.
  • :spiral_calendar: Interest Only Periods:
    • An 84-month timeline was discussed with two initial years being interest-only; principal payments begin thereafter.
    • Loan payoff calculations depend on these timelines and structures.
  • :key: Conclusion:
    • All calculations hinge on accurate and complete input values; without them, the system defaults to placeholders or remains inactive.

Insights Based on Numbers

  • $7 Million Land Acquisition:
    • Represents the starting point of project financing before adding construction costs.
  • 84-Month Loan Timeline:
    • Signifies the structured payoff period, impacting both lender and borrower yields.