What is the maximum amount that can be loaned on a property


What is the maximum amount that can be loaned on a property whose net operating income (NOI) is $500,000 per year , suppose the underwriting criteria is a maximum loan/value ratio (LTV) of 75%, and we estimate property value by direct capitalization using a rate of 11% on the stated NOI. By this criterion what is the maximum loan amount?

$2,789,406

$3,409,091

$3,844,614

$4,000,000

$4,139,619

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Financial Management: What is the maximum amount that can be loaned on a property
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