SSUD71-126 Property finance and investmentGuide to assignment 1• Please review the Assignment Rubrics1. undertake a detailed analysis of the transaction• How much capital do you have?• How much capital will you need?• How will the capital be applied?• What is the capital structure?• What is the value of an expression of interest?• Is it sufficient to support a bank loan?2. What do you need to support an application for construction loan?3. Matters regarding construction and investment loans application• How will PD repay the short-term construction and long-term investment loans?• How will PD pay interest using the construction period?• How many banks will you approach for a loan?4. What requirements will the bank apply to development and investment loans?• How much will they lend?• What security is required?• What covenants are likely to applied?• What interest rates will apply?• How long will it take to construct and commission the property?• Will the bank look at the intentions of the developer?• Will the bank consider statements of assets and liabilities for the borrowingcompany, its directors and the project?5. Calculation and interpretation• Weighted average cost of capital• Initial yield• Running yield• Internal rate of return• Net present value• Return on equity (before tax)• Return on asset• Breakeven ratio• Expenses ratio• Loan to value ratio• Any other ratios you think it is importantStructure of the reportExecutive summaryIntroductionMarket informationCapital structureRisk analysisSupporting documents for loan applicationConclusion
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