Paul E Stansen APC
Financing
Commercial property financing
Paul Stansen is an experienced commercial mortgage Broker with a comprehensive understanding of the commercial real estate market and the various types of mortgage products available. Paul works closely with his clients to identify their acquisition debt and refinancing needs and objectives. The involvement is customized to the property requiring financing and client’s financials. From credit report to global cash flow to profit & loss statements and balance sheets, it ALL matters.
The eye to details cannot be overstated. Clients can be shocked over how approval pivots on nuance.
Paul’s objectives are focused on providing comprehensive support and representation to clients throughout the entire process, from initial consultation to loan closing and beyond with an aim to negotiate the best possible financing terms for them and their properties. Paul embraces the fact that every real estate investment is unique, and so too are the borrowing client’s overall financials. Paul approaches each file, each borrowing client with a fresh perspective and a focus on delivering results.
Loan & DSCR calculator
Monthly payments, debt coverage and commercial financing ratios.
Your financial analysis
- Annual debt service
- Debt service coverage ratio
- Annual cash flow after debt service
- Loan constant
- Debt yield
- Cash-on-cash before purchase costs
- Cap rate
- Loan-to-value
How these numbers are calculated
Payments use a fixed annual rate divided by 12, with payments at the end of each month. Annual debt service is 12 monthly payments. Debt coverage is annual NOI divided by annual debt service. Debt yield is NOI divided by the loan amount. Loan constant is annual debt service divided by the loan amount. Cap rate is NOI divided by property value. Cash-on-cash is annual cash flow after debt service divided by property value less the loan amount, before purchase costs and reserves. “N/A” means the ratio has no positive denominator.
What is debt service coverage ratio?
In commercial real estate, the debt service coverage ratio – often shortened to DSCR or DCR – is the measurement of an asset or entity’s cash flow compared to its debt obligations.
For a commercial property, DSCR is annual net operating income divided by annual debt service. A ratio below 1.00 means income does not cover the debt payments; a ratio above 1.00 means income exceeds those payments. In commercial lending, stronger debt coverage generally supports the financing request.
Commercial mortgage lenders scrutinize the debt service coverage ratio as a means of cash flow analysis. DSCR is highly valued by lenders because it’s one of the best predictors of a borrower’s ability to pay back a loan on time. In order to mitigate risk, most lenders and loan programs have DSCR requirements for prospective borrowers. In most cases, DSCRs of 1.25x or more are required. Technically, DSCR requirements are dependent on the combination of numerous factors, including the financial strength of the borrower and the type of property in question.
Commercial financing consultations
Whether you are a seasoned commercial property owner or a first-time investor, Paul is here to help.
Preliminary consultations are complimentary. Together we will learn more about each other and your property that will lead to strategies that will assist you in achieving your real estate investment goals.
Paul can provide referrals who can speak directly to what it is like to have him work your file needs.