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What is the maximum annual debt payment

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Question - An investor is interested in buying an office building with a commercial mortgage loan. The annual stabilized NOI (Net Operating Income) for this office building is $900,000. This investor just obtained a quote from a commercial bank on this commercial mortgage loan and was told that minimal Debt Service Coverage Ratio (DSCR) required by this bank is 1.25 so that the net income generated by this office building would be sufficient to cover the debt payment. What's the maximum annual debt payment allowed indicated by that stabilized NOI of this office building as well as the min. DSCR?

Reference no: EM133164642

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