You have negotiated to buy a property for $4,000,000 that has an annual NOI of $250,000 in year 1, $265,000 in year 2, and $280,000 in year 3.

You apply for a loan with a lender who says the loan amount must size based on a maximum 70% LTV and a minimum 1.25x DSCR. The lender quotes an interest rate of 2.00% over the 10-year Treasury, which is 4.85% today. The lender will amortize the loan principal at 25-years.

Size this loan based on Year 1 NOI and the purchase price (assumed value). What is the maximum loan amount?