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Sam is looking to purchase a commercial building that has an NOI of $405,000. Sams lender requires a Debt Coverage Ratio of at least 1.2.
Sam is looking to purchase a commercial building that has an NOI of $405,000. Sams lender requires a Debt Coverage Ratio of at least 1.2. Sam is able to get a 5.0% fixed rate loan fully amortizing over 30 years. Based on the maximum Debt Service, what is the maximum amount that Sam can borrow for the purchase of the property?
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