How to Calculate Loan Constant

>> YOUR LINK HERE: ___ http://youtube.com/watch?v=c9k2CETUkqM

Learn REAL ESTATE FINANCE INVESTMENTS at https://realestatefinanceacademy.com/ • For COMMERCIAL LOANS, visit https://www.evergreen.llc • --- • How to Calculate Loan Constant | The Loan Constant Formula in Real Estate • Loan Constant is a financial term, somewhat related to Cap Rates and Cash on Cash, in that it indicates on a percentage basis the cash return to the lender relative to the outstanding loan balance. Constant basically tells us how much principle and interest is being paid back to the lender divided by the loan amount. • Let's take a look at the formula and I'll run through a couple examples. Loan Constant or K, as it's abbreviated, is simply the annual debt service divided by the loan balance. Let's take a look at an example. Imagine we have a one million dollar loan at, say, 6% per year amortized over 30 years. In this case, our annual debt service would be approximately $72,000 a year. Divided by a million dollars, that comes to a constant of 7.2%. • If that same loan were amortized over just, say, 25 years and our annual debt service would be about $77,000 or a 7.7 constant. Of course, if the interest rate went up to, say, 7% over 25 years, then our debt service would be in the $84,000 range or an 8.4% constant. • Lender's return, cash-on-cash return to the lender, changes depending on the terms of the loan that is written. Lenders that want to recoup cash more quickly can charge 100% interest rate or shorten their amortization in order to do so. • If you have questions, please share them in the comments below. We'll answer all questions AND your questions help us to build more helpful material! • Watch next: What are Capital Expenditures aka CapEx? https://bit.ly/3emnhZk • -- • SUBSCRIBE for more commercial real estate finance course videos - https://bit.ly/3y6U6lW • --- • Please subscribe AND check out our full courses at https://trevorcalton.com/ for more content and in-depth training. • • CRE loan • investing in real estate • investment properties and commercial real estate • commercial real estate lending • commercial real estate loan • SBA commercial real estate loan • commercial real estate financing • commercial property loan • commercial building loan • real estate lending • best commercial real estate loans • commercial property lending • #commercialrealestatecoaching #commercialrealestateinvesting #TrevorCalton #investing #realestate #TrevorCalton #EvergreenLLC #realestateinvesting #commercialrealestate #realestatefinance #realestateloan #loans #lending #realtortraining #loanconstant #diagram #example #howto • • Other Queries : • how to invest in real estate • investing in real estate • lender return • loan constant formula • loan constant tables • mortgage constant • real estate finance basics • real estate investing • real estate investing 101 • real estate investing strategies • real estate loan constant • how to calculate loan constants • loan constants formula in real estate • loan constants calculation • calculating loan constants • loan constants equation • what is a loan constant

#############################

New on site