How to determine property value for bank loan
A partner and I are looking to buy long term properties for lease. Was hoping to get an example of how a commercial bank values a property for their LTV.
Example:
Office property is listed for $650k. It has a cap rate of 9%. 12yrs on lease. Building is 5800sq ft.
Is the value a bank looks at the value of the lease, $700k, as well as the value of the property and add them together? If the office space is valued at $300k does that make the overall valuation of the property $1mil