For those who want to jump into the income property lending market, the whole thing can seem like a daunting task. All the terms, percentages and figures can be quite confusing. Debt Service Coverage Ratio is no different. If you’ve begun to delve into the world of income property lending already, Debt Service Coverage Ratio (or DSCR, as it is known in IPL world) is something that you’ll come across quite often; it is quintessential income property lending.

The good thing, though, is that Debt Service Coverage ratio is just one of the many topics discussed at large in Keith Kennedy’s free eBook entitled Commercial Real Estate: Fundamentals of Income Property Lending for Beginners. This eBook provides those with an interest in commercial property lending with the knowledge to enact their dreams of taking advantage of the commercial real estate market, as well as providing a powerful advisor in the process: Kennedy Mortgage Corporation.

However, let us a take a more in depth look at DSCR and how Commercial Real Estate: Fundamentals of Income Property Lending for Beginners can help you take advantage of it.

What is Debt Service Coverage Ratio?

In the world of commercial real estate, the Debt Service Coverage Ratio (DSCR) is becoming the most important ratio among most Income Property lenders. The first Section of Commercial Real Estate: Fundamentals of Income Property Lending for Beginners mentions the implications of overbuilding and high vacancy rates. These factors are making lenders look very closely at the property’s cash flow and ability to service the payments on the loan. The primary way of calculating this ability is the Debt Service Coverage Ratio. DSCR is a way for the lender to ensure that they’ll still receive payments on the loan they gave you, regardless of the economic climate.

The truth of the matter is, lenders want an additional comfort level in case there are any changes in either the Net Operating Income of the property, interest rates, or other economic factors. This is the reason why lenders seldom make a loan with payments in excess of the total amount of the Net Operating Income of the property.

Another fact about the DSCR to note is that it is always expressed in terms of a ratio, specifically to 1.0. Therefore, if a property has a Debt Service Coverage Ratio of 1.30 to 1.0, it means that there is $1.30 of income on the property for every $1.00 of payments. Therefore, it’s easy to see why this ratio is so important, and it is also easy to see why learning how to calculate this ratio is also important.

How Can Kennedy Mortgage Corporation’s Free eBook Help Me With DSCR Calculations?

Keith Kennedy and the team at Kennedy Mortgage Corporation understand that calculating Debt Service Coverage Ratio can be quite daunting to a beginner in the commercial real estate market, and that is one of the reasons why it is covered in their free eBook Commercial Real Estate: Fundamentals of Income Property Lending for Beginners. Aside from providing an in depth explanation of DSCR, Commercial Real Estate also doubles as a comprehensive workbook, with step by step instructions on how to calculate this important ratio, as well as practice questions to help you hone your skills.

Commercial Real Estate: Fundamentals of Income Property Lending for Beginners is like having your own personal commercial real estate coach with you each step of the way, to help you learn the tides of the market, the do’s and don’ts as well as some of Keith Kennedy’s tips on the market, tips that have helped him originate more than one billion dollars in loans to date. And where you need more clarification, as well as professional assistance and a powerful advisor, Kennedy Mortgage Corporation fills that need quite adequately with all our strategic partners.

If you’re looking to take a jump into the commercial real estate market, or you’re just looking to clarify your knowledge and brush up your skills, Commercial Real Estate: Fundamentals of Income Property Lending for Beginners is the eBook for you! It has a treasure trove of knowledge that will help you actualize your dream of becoming adept at commercial property lending, and it’s completely free! You can order the book on our web www.mtgpower.com or e mail us.