Finance Assignment: Office Complex Purchase and Mortgage

This finance assignment analyzes the acquisition and financing of a small office complex. It addresses key aspects of real estate finance, including identifying suitable third-party lenders (banks), evaluating mortgage terms, and understanding the role of covenants in loan agreements. The assignment explores the advantages of borrowing from banks, particularly for large purchases, and discusses the conditions lenders place on mortgage contracts to protect their investment. It further examines third-party mortgage brokers and their role in the process. The solution also delves into a scenario involving a loan at 5% interest, a property sale to a third party with a 10% loan, and the factors influencing such a purchase, such as the capitalization rate. The assignment provides a comprehensive overview of real estate investment analysis, financing options, and the implications of different financial terms.