You are a Loan Officer with an Investment Bank. Today you need to set your lending parameters.

They are: DSCR: 1.25

LTV: 65%

10 Year T-Bill: .447

Rate Markup: 325

Basis Points Term: 25

Years Amortization: 25 Years

A small investment company is buying an investment property. The terms are:

Cash Flow: $107,000

Cap Rate: 6.02%

What is the price?

What is the annual debt payment?

What is the mortgage constant?

Does the debt create positive or negative financing?

As a lending officer, would you do this loan? Why?