Case Study Loan Question
Hi,

I've asked here before for advice on a case study and it was helpful. The one I'm working on right now is pretty easy, but I'm not exactly sure how to model the Debt. The premise is that I am an asset manager assigned to a property my company purchased **2 years** ago exactly that hasn't been performing well. I have the trailing financials for the past year and information regarding the acquisition. I am supposed to make a recommendation for a value-add strategy to turn the property around. 

The question I have is surrounding setting up the loan and debt service in excel. These are how the loan terms were given to me.

Loan Proceeds: $XXX,XXX,XXX

Interest Rate X.XX%

Interest Only Period: 24 Months

Prepayment Lockout: Lockout during IO Period

Term: 10 Years

Amortization: 30 years (360 Months)

I know that the payments prior to my takeover as the asset manager of the property have been IO and haven't amortized the loan at all. However, when setting up my new monthly payment for my pro forma, what does the 10 year term have to do with anything? They told me to analyze for a 5 year hold, but I will probably show some different hold periods as well for bonus points. Additionally, would the amortization period I'd enter into the payment formula be 360 or would I deduct the 24 months that the loan would be interest only. I know that taking the 24 months away sounds wrong, but I work in strictly multifamily right now where we don't see any IO loans with the exception of construction loans.
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