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You own a real estate investment company and your interns have provided the below annual...

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Finance

You own a real estate investment company and your interns have provided the below annual estimates of NOI for an office building you can acquire today for $5m. They also estimate you would receive $6.3m in net sale proceeds when the property is sold at the end of 3 years based on paying 5% brokerage expenses. PNC bank has offered you a 3-year $3m interest-only loan at 5% with annual payments and no origination fees. How much taxable income would you be eligible to deduct during the first year due to the mortgage interest deduction? Please round your answer to the nearest dollar

Year 1

Year 2

Year 3

Year 4

NOI

$367,530

$378,799

$390,406

$402,361

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