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You can purchase a new apartment building for 2,000,000. The bank has quoted an 80% LTV, and a 1.30 DCR (Debt Coverage Ratio). The loan
You can purchase a new apartment building for 2,000,000. The bank has quoted an 80% LTV, and a 1.30 DCR (Debt Coverage Ratio). The loan would be amortized for 30 years, the annual interest rate is 4%. The annual NOI is $110,000. What is the DCR of a loan calculated using the LTV max given by the lender?
1.35
1.20
1.25
80%
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