You will be purchasing a $4,000,000 retail center Bear Avenue. The projected annual NOI is $300,000....

You will be purchasing a $4,000,000 retail center Bear Avenue. The projected annual NOI is $300,000. Your lender will only give you $3,100,000 to finance the purchase. What is the implied minimum DSCR given the following information (rounded to 2 decimal places)? 75% LTV 4.50% rate (monthly compounding) 10 year loan term 30 year amortization

Expert Solution

Purchased Price	$4,000,000.00
LTV	75.00%
Loan Value = $4000000 x75%	$3,000,000.00
Rate	4.50%
Loan	$3,000,000.00
Effective Loan rate = Effect(4.50%,12)	4.59%
Period	30
Annual Payment = Debt Service = PMT(4.59%,30,-3000000)	$186,216.28
DCR = NOI/ Debt Service
DCR = $300,000/$186,216.28	1.61	times

jeff jeffy answered 2 years ago

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