Hello, bank? Yes, I'd like a $1,000,000 loan for my first real estate investment property. Great! What is your DSCR? 1.25. Sounds good. Here's a million bucks. Hello, bank? Uh, I'd also like that $1,000,000 loan for my first real estate investment property. Great! What's your DSCR? Excuse me? Your debt service coverage ratio? Huh? You know, your projected net operating income divided by your annual debt payment? Uh... The ratio of what you think you'll make versus what you will 100% owe to us. Okay, I'll bet it's a 1. Sorry, too low. But I would be able to pay you. Maybe. But if your projections come up too short, which they usually do, we need a little bit of a cushion. Besides, you should want to be over 1 so you can pay us back and show your investors a little bit of a return. That way, you might even attract additional capital in the future. Thanks for the free tip! Oh, don't worry. You'll be paying this back for years.

Learn about the importance of Debt Service Coverage Ratio (DSCR) when applying for your first real estate investment loan. Ensure financial stability and attract investors with a solid plan.