DCR (debt-coverage-ratio) is the ratio of a property’s net operating income (income after expenses but before debt service) to the annual debt payments due on the loan. For example, a property with an NOI of $100,000 and annual debt payments totaling $80,000 would produce a DCR of 1.25 ($100,000/$80,000). This is the ratio that Lenders […]

A proforma tells you the Gross Income Multiplier (GIM) and the CAP (capitalization) rate for the property. But they come in many different versions, so there is no real standard to consider. Hopefully you will also learn what current rent rates are overall along with income and expenses and other building details. Ideally it would […]