Catherine BellEmpowering Women to Create Financial Freedom Through Passive Income, Real Estate, and Social Impact

Unlock Real Estate Deals: LOI Rewrite & DSCR Secrets Revealed! #shorts

27 Jun 2026 · 1 min

Watch on YouTube

0:55

In this short, the speaker breaks down a commercial real‑estate loan assumption: a 7.5% interest rate over 25 years with a balloon payment. He notes the annual debt service of $186,000 against a stated NOI of $252,000, yielding a DSCR of 1.35 at a purchase price around $2.1 million. He then shows that raising the price to roughly $3 million would cause the DSCR to collapse, meaning the debt could not be serviced. From this analysis he concludes the current asking price is justified because it must cover debt service, and suggests the seller is likely motivated to sell because a full‑debt financing on a $3 million price would be unsustainable.

Chapters

The 2.1 is going to be at 7.5% interest over 25 years, commercial note, and it's a balloon. So were they going through and hashing through that? We've got an appointment that's going to start here at 20 o'clock. So right here, the loan assumption showing it right there, annual debt service is at $186,000 with a $252,000 stated NOI. Keep going down. You're going to see that you've got a DSCR of 1.35. So that's at the 2.0, that's at the price of 2.1. Right? So if we take that back up to 3-something, you're gonna see that the DSCR score goes to shit. Keep going down. Keep going down. Okay. So our price is justified based on the idea that we need to cover our debt, right? To run it. And based on the number he's providing us, if we had full debt on that $3 million price, there's no way to cover that debt. We'd be paying for them to be there, right? We keep going down. It's probably why they're selling.