Band Mortgage Equity Capitalization or Atkerson format Ellwood
  • Band Mortgage Equity Capitalization or Atkerson format Ellwood
Originally published: 04/10/2016 21:10
Publication number: ELQ-60041-1
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Band Mortgage Equity Capitalization or Atkerson format Ellwood

Incorporate and understand a financing's impact on value and compute the cap rate.

assumptionsatkersoncap ratecapitalizationellwoodfinancemortgagenoireal estate

Description
This is the classic Ellwood Method of deriving a cap rate updated to allow for compounding of NOI over time and useful for examining assumptions behind market cap rates.

Inputs:
- NOI Year 1
- NOI Growth Rate Per Year
- Equity Yield Target
- Mortgage Rate
- Amortization Term Yrs
- Loan to Value ratio
- Holding Period
- Transactions costs at sale

Outputs:
- Cap Rate
- Value
- Debt Coverage Ratio (DCR)

- Prof. Norm Miller, PhD

This business tool includes
1 Excel Model

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