Summary
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.
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.
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.
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.
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.
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.