Yes I am a broker and have been for years. I prefer the option of being able to offer my client what they “need” as opposed to what I have to “offer” (if I worked for a specific lender).
I do not know of a set ratio, and this is just my basic formula, but if someone comes to me and does not know the expenses of a property, I usually estimate (perhaps on the high side) and deduct 15% for management and vacancy, then 30% in additional expenses. That leaves an estimate of 55% of gross revenue as NOI.
Your example of 47% just makes me wonder where the additional expenses are appearing. But then I do not recall you mentioning the occupancy of this property and that might be the answer.
For your information, the “best” loan programs will require an occupancy of 90%.
If their are any brokers or Banks who can provide this, please respond. I have a 44 unit fully occupied. Asking price is 1,500,000. NOI before debt service is 125,000 Revenue is 267,000. The building is in excellent cond. Please send interest rate and terms. Also send max amount you can lend.
Probably not for that loan amount.
If it were, you would still need an interest rate of 6.15% or less and a 30 year amortization to keep your DSCR @ 1.2 or less. Since Prime Rate is now 5.75%, I
do not see that happening.
However, regarding Debt Service: $125,000 NOI on $267,000 Revenue seems to me a little lower than normal (47%). Why?
What should the rate be for debt service 47% is what it is now. What should it be? The 1.5Mill is an asking price. Are you a broker? The property is in NY