CF statement for shophouse investment
Hi could anyone help me model this question through excel so that i am able to double check it.
Thank you!
Instructions
1) Based on the below assumptions, please draft a simple CF model for an investment period of 4 years on a Quarterly basis. Any assumptions you believe are missing, please use your own assumptions and state them accordingly.
Property Location: Prime Area
Asset Class: Shophouse
Deal structure: Share Deal
Property size: 15,000 Sqft
Acquisition price: 38 Million
Acquisition cost : 1.5% of acquisition price
CAPEX in month #6: 2 Million
Current Gross Rental Yield: 3.00%
Current Vacancy: 20%
Bank Loan on Acquisition Price: 50% ( 5 year bullet loan)
Capex Loan: 50% of Capex
Interest rate: 1.3% over LIBOR
The property will be vacant from month #6 onwards during renovation for a period of 6 months.
After that, the property will be full leased within a 1 year period. The market rent after renovation is $7.50/sqft/month.
Annual rental increase: 4%
Exit Yield on gross rental: 3.00%
Exit cost on disposal value: 1.50%
2) Calculate the IRR of this investment plus the Equity Multiple.
3)Please include your assumptions plus your conclusion if you should acquire the property if the expected IRR is 15%
Hey Shwnfng1, sorry about the delay, but are any of these useful:
Fingers crossed that one of those helps you.
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