In negotiating an income property loan, the size of loan the borrower can obtain is usually more of a sticking point than the rate or the loan fee. Since income property loan sizes are generally limited by the debt service coverage ratio (i.e., cash flow), rather than the loan-to-value ratio, the operating expense figure that…
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First a correction. A few days ago, I wrote a blog article about how deflation is sweeping the world. In that article, I mentioned that deposit rates in Germany are slightly positive. I am pretty sure that this statement was wrong. Listening to Bloomberg today, I just discovered that the yield on ten-yield German bunds…
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“Hey, George, recently I have heard commercial real estate loan officers talking about some new ratio called the Debt Yield Ratio. Is this just a shortened version of the Debt Service Coverage Ratio?” Answer: No. The two ratios are totally different. The Debt Yield Ratio is defined as the Net Operating Income (NOI) divided by…
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