00:01
A real estate investment company, arigic, requires a debt coverage ratio of 1 .4 for all property assets and has access to an interest -only line of credit that costs 8 % per annum.
00:19
If a potential property investment has an noi of $150 ,000 and costs $2 million, what is the maximum permissible leverage ratio of the arigic for this property? the maximum permissible leverage ratio would be calculated based on the debt coverage ratio, the net operating income and the interest rate.
00:53
So the ltv, which is the maximum permissible leverage ratio, is equal to noi, the net operating income, divided by the interest rate, i, times dcr, debt coverage ratio, times 100.
01:14
So noi is the net operating income, which is $150 ,000.
01:18
The interest rate is given as 8%, which is 0 .08.
01:24
And the dcr is 1 .4...