Valuable Shorthand Tool For St Cloud Real Estate Investments

Valuable Shorthand Tool For St Cloud Real Estate Investments

St. Cloud real estate investors who are taking a hard look at this autumn’s St. Cloud listings can be counted on to have some blend of two objectives in mind. They’ll be looking for a property that will bring in cash on a regular basis, or one that grows in collateral value over the long haul—or some combination of both. Experienced investors can do a quick estimate of how most St. Cloud properties will meet their objectives—although they will be working through more exact projections once they’ve winnowed the Field down to a few candidates.

If financing is to be involved, the acronym “DSCR” enters the picture.

The DSCR (Debt Service Coverage Ratio) won’t matter if the investor plans to pay cash upfront or will apply for a loan based on his or her personal assets and income. But if the loan will be collateralized on the investment property itself, its DSCR will be key.

It's a calculation that makes perfect sense. Using Motley Fool’s broad definition, it is the quotient of the investment property’s NOI (net operating income) divided by its debt obligation.

That means that a DSCR of 1.0 is a shorthand way to describe a break-even situation—one where the investment can exactly pay for itself with nothing left over. If the DSCR is accurate, such an investment property stands to build equity without costing the investor anything beyond the original down payment.

Similarly, a DSCR of less than 1.0 means that the investor will have to add cash to keep the investment above water; just as a DSCR of more than 1.0 means it generates cash in addition to paying its own way.

Motley Fool says that most lenders want to see a ratio of at least 1.2, which would provide enough of a cash flow cushion to allow the bankers to sleep at night. St. Cloud investors want to sleep at night, as well—so St. Cloud investment properties that pencil out with DSCRs of 1.2 or better look appealing to them, too.

I’m here to help you discover and secure St. Cloud investments that fit your objectives. To get started, it’s even simpler than figuring a DSCR: call me!  

Microphotography of Orange and Blue House Miniature on Brown Snail's Back

Providing a superior level of informed, professional real estate services to buyers and sellers throughout Central Minnesota. We have agents specializing in residential, commercial, multifamily, new construction, existing, investment properties, foreclosures/REO, and short sales with offices located in:

Five Office Locations To Serve YOU!

Saint Cloud 320-259-4554
Princeton 320-983-3555
Maple Grove 763-565-2000
Hutchinson 320-455-9127
Field&beds=0&baths=0&min=0&max=100000000&map=0&quick=1&submit=Search" title="Search Properties in LitchField">LitchField 320-298-1140

Premier Real Estate specializes MANY areas around Central MN including Saint Cloud, Waite Park, Rice, Royalton, Sartell, Royalton, Little Falls, Cold Spring, Saint Joseph, Elk River, Monticello, Ramsey, Saint Michael, Andover, Ham Lake, Anoka, Champlin, Buffalo, Glencoe, Brownton, Silver Lake, Kandiyohi, Dassel, Minneapolis, Maple Grove, Saint Louis Park, Saint Paul, Robbinsdale, Crystal, New Hope, Brooklyn Center and more!


Noel Johnson Headshot
Author:
Phone: 320-980-3100
Dated: November 27th 2019
Views: 92
About Noel: Passion for investing in real estate brought me to create Premier Real Estate Services in 2002. Ten ...

Property Search









RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

Premier Real Estate Services
550 25th Avenue North
St. Cloud, MN
320-259-4554


Other Locations