HANDOUT “Real Estate Loan Underwriting Worksheet” COMMERCIAL REAL ESTATE ... “Real Estate Loan Underwriting Worksheet” COMMERCIAL REAL ESTATE: APPRAISALS CASH FLOW ANALYSIS Richard A. Hamm President Owner Advantage Consulting Training Huntsville, Alabama advantagecons@

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  • HANDOUT Real Estate Loan Underwriting Worksheet

    COMMERCIAL REAL ESTATE: APPRAISALS & CASH FLOW ANALYSIS

    Richard A. Hamm President & Owner

    Advantage Consulting & Training Huntsville, Alabama

    advantagecons@bellsouth.net 256-536-0357

    August 5, 2016

  • REAL ESTATE LOAN UNDERWRITING WORKSHEET

    Date of Analysis: May 2015___ >

    Year 2013 2014 2015

    Source tax return tax return tax return

    (customer prepared, tax return, etc.)

    NET OPERATING INCOME (NOI) and CASH FLOW AVAILABLE FOR DEBT SERVICE (CFADS)

    Gross Potential Income $166,800 $166,800 $166,800 100% $166,800 100%

    Vacancy 300 2,700 2,200 1.3% 11,700 7.0%

    GROSS EFFECTIVE INCOME 166,500 164,100 164,600 155,100

    Management Fees 0 0 0 0.0% 7,700 5.0%

    Maint.Exp.& Repairs//Reserve 7,300 9,200 14,200 8.5%

    Capitalized Expenditures* 0 5,000 5,000 3.0%

    Insurance Expense 2,900 3,100 4,000 4,000

    Utilities Expense 2,400 3,000 2,800 3,000

    Property Tax Expense 9,100 9,700 9,800 9,800

    Other Expenses or Reserves** 5,500 5,400 5,100 5,200

    TOTAL EXPENSES 27,200 35,400 40,900 24.5% 43,700 26.2%

    NET OPERATING INCOME $139,300 $128,700 $123,700 74.2% $111,400 66.8%

    Distributions, Other*** 10,000 10,000 15,000 5,300

    CASH FLOW AVAIL FOR DS $129,300 $118,700 $108,700 $106,100

    DEBT SERVICE COVERAGE ANALYSIS

    Cash Flow Avail. For Debt Serv. $129,300 $118,700 $108,700 $106,100

    Total Annual Debt Service**** $91,700 $91,700 $91,700 $86,600

    DSC (x) 1.41 1.29 1.19 1.23

    CFADS x 90% $116,370 $106,830 $97,830 $95,490

    Total Debt Serv.@ Int.Rate+2% $103,400 $103,400 $103,400 $94,600

    Stress Test DSC (x) 1.13 1.03 0.95 1.01

    LOAN-TO-VALUE ANALYSIS

    Most Recent Appraisal Date 03/22/2009 Value $1,064,000 LTV 61%

    Pro-Forma NOI (from above) $111,400

    Est. Current Cap Rate 10%

    Pro-Forma NOI x 90% $100,260

    Est. Current Cap Rate + 1% 11%

    Notes:

    *Calculated using [(incr.) decr. in net bldgs. & depreciable assets, from Sched. L] - depreciation expense

    ** Excluding interest exp. & depreciation; can include release or rollover reserve, etc.

    ***Distributions net of any contributions; other cash items from Schedule K, M-1 or M-2 if not used within NOI

    **** Usually test historical CFADS against historical debt service; can test against proposed debt service

    Distrib. 13,000

    Mgt. Fee (7,700)

    (Rev. 12/2013)

    LOAN AMOUNT: $650,000

    71%

    $1,114,000Current

    Est. LTV58%

    $911,455

    Stress-

    Test

    Est. LTV

    CUSTOMER or PROPERTY: Smith Apts. LLC/Oak Trace__

    Pro-Forma

    14,000 8.4%

    Stress-Test

    Est. Value

    Current

    Est. Value

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