The Lender’s DCR – Theoretical and OptimisticLenders calculate Debt Coverage Ratio (DCR) by dividing Net Operating Income (NOI) by Annual Debt Service.Their version of NOI is usually based on: Market rent (sometimes even above actual rent) Standard vacancy allowance (often 5%) Limited expenses — typically taxes, insurance, and maybe management at 8–10%That’s it.

I live out of state and am self managing...how do I collect their rent?

This ensure you are not taxed on the entire sale despite only collecting a small portion of the total sale.

Building two  had recently lost its tenant at 8800 square.Mortgage Interest for the two buildings was $175,000, debt service about $200,000, resulting in negative cash flow let alone any cash for tenant buildouts for the vacant building.  

@Samuel Awosolu Thank you for the advice, fortunately due to grades and scholarships I should be debt free if not close to debt free post grad.

Investors get a fixed or “fixed-plus” return, but without the strict payment structure of debt.

Good luck collecting if their deposit is insufficient for the damages.  

It’s not just about finding good properties —it’s about how you fund them.The structure of your capital stack determines how fast (and safely) you can grow.Here’s a simple breakdown 👇🔹 Senior Debt: Cheapest capital, but limits flexibility.🔹 Mezzanine Financing: Bridges the gap between debt & equity — adds leverage without giving up control.🔹 Preferred Equity: Fixed return for investors, keeps ownership in your hands.🔹 Common Equity: Where the upside lives — and the risk.The secret?

I've purchased my own home without a mortgage and I own all of my vehicles with no debt.

You will need cash or debt, its either one of the other.