Module 11 — Underwriting: Financing & Returns

Module 11 — Underwriting: Financing & Returns

Topic 11.1: Modeling Your Loan: Principal & Interest

Now we account for the mortgage. The payment consists of Principal and Interest (P&I). You can use an online calculator, but it's better to use the built-in PMT function in your spreadsheet. This keeps your model dynamic.

Expert Action: Add your financing details. In a new "Financing" section, input the Interest Rate (6.5%) and Loan Term (30 years). Then, in your "Monthly Cash Flow Calculation" section, add a row for the mortgage payment.

  • Cell E2 (Interest Rate): 0.065
  • Cell E3 (Loan Term): 30
  • Cell B20 (Monthly Mortgage P&I): =PMT(E2/12, E3*12, -B4) (This should calculate to $852.59)

Topic 11.2: Calculating NOI, Cash Flow, and Key Metrics

You've built all the pieces. Now, let's assemble them. In this topic, we'll calculate the final, mo