DSCR

DSCR (debt service coverage ratio) — NOI divided by annual debt service. DSCR 1.0 means the property exactly pays its own loan; below 1.0 you feed it monthly from your pocket. Banks underwrite around it; this course requires ≥ 1.25 at purchase, on honest numbers — not pro-forma, not “after I raise rents.” A vanilla Manila condo at 80% LTV typically computes to 0.5–0.7, which is the whole condo-trap argument in one ratio.

First used in: 3.1 · Leverage: the sword’s both edges