4. You decide you want to take out a loan to finance the purchase of this property. It will be a 10 yr balloon at an interest rate of 4.25% amortizing over a 30 year period with monthly payments and monthly compounding. The lender will provide financing up to a minimum Debt Service Coverage Ratio (DSCR) of 1.2 based off the 1^st year NOI.

What is the largest annual loan payment the lender will allow you to make based on the DSCR?

5. If you get a loan that corresponds to the largest annual loan payment the lender will allow you to make based on the DSCR (computed in part 4), what will be your net income (Cash flow after debt service) in the first year?

6. What is the largest loan a lender is willing to provide you with based on question 4? (Use the terms and loan payment from question 4.)