Welcome to the RAND-CRE show, commercial real estate with no stone left unturned.

Hey, everyone, welcome to the RANDCRE show.

I'm your host, Mike Taravella, with our special co-host guest, entrepreneur, amazing man,

Will Blandman, how are you today?

So well, Mike, just running the marathon one step at a time and I'm glad to hear we realized

that Mike's voice travels well. Yeah, it's a breaking news, Rans theory alert. You heard it

here first from Will that my voice is very loud. But Will, let's get the listeners from value. What are we

talking about today? So today we're talking about loan assumptions. And we're in an environment

now where the past four or five years, a lot of borrowers were signing up for these fantastic

terms on loans. And they would, along with that, they would take yield maintenance.

And for those that don't know, yield maintenance is a, it's a complex calculation.

In summary, it's quite expensive to pay off your loan with the yield maintenance expense, our prepayment penalty.

And the reason for that is the lower the lower that the US Treasury drops, the more expensive

the yield maintenance gets.

So if you got a loan of an interest rate of 4% or 5% when the Treasury was 2% or so,

and now we're in an environment where the Treasury's less than 1%.

It, if that the way that the yield maintenance calculation is calculated,

that will significantly increase your yield maintenance.

And to give our listeners perspective, I mean, you guys are looking at a deal,

$8 million deal that had a $1.6 million prepanment penalty.

So.

And that was like a year, a year apart of when they bought it, right?

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