Tommy DobczykOpportunity Zone Advisor, OZ Wizard · Director of Development | Certified Opportunity Zone Advisor

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

27 Jun 2026 · 1 min

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0:55

In this short, Tommy Dobczyk walks through a commercial real‑estate loan assumption to illustrate how loan terms, property price, and cash‑flow metrics interact. He outlines a 7.5% interest, 25‑year commercial note with a balloon payment, noting an annual debt service of $186,000 against a stated NOI of $252,000, which yields a Debt Service Coverage Ratio (DSCR) of 1.35 at a purchase price of $2.1 million. He then raises the price to roughly $3 million, showing the DSCR collapses, indicating the debt could not be covered. Dobczyk concludes the lower price is justified because it’s the only level at which the debt can be serviced, and the inability to cover debt at a higher price likely explains why the seller is motivated to sell.

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.