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    Ratio Analysis Report
 
             (See Report Below)  
 
  The Ratio Analysis Report provides year to year projections for important real estate financial analysis tools and ratios.  A brief description of the most important real estate ratios follows.

Capitalization Rate or Cap Rate is a ratio which is used by investors, lenders and appraisers to estimate the market value of income producing properties. To learn more about the cap rate, click on the following link.

 
                 Capitalization Rate
      
  Gross Rent Multiplier or GRM is a ratio that provides a rough estimate of market value for income producing properties.  Investors use it to quickly size up an income property since it requires very little financial detail to calculate.  To learn more about the GRM, click on the following link.  
                 Gross Rent Multiplier   
 
  Loan-to-Value Ratio or LTV is the ratio between the balance of a loans and the appraised value of a property.  Lenders will typically require Loan to Value ratios from 70 to 80 percent when purchasing commercial property.  To learn more about the Loan to Value ratio, click on the following link.  
                 Loan to Value
      
  Debt Coverage Ratio (DCR) or Debt Service Coverage Ratio (DSCR) is a ratio that shows the relationship between net operating income and debt service.  It measures an income property's ability to pay operating expenses and mortgage payments.  A DCR of 1 is breakeven.  Most lenders require minimum debt coverage ratios of 1.2 or greater.  From a bank's perspective, the larger the better.  To learn  more about the Debt Coverage Ratio, click on the following link.    
                 Debt Coverage Ratio
 
  Cash on Cash Return shows the rate of earnings derived from an income property investment by dividing cash flow by the initial investment amount.  It  is used to measure the profitability of income producing properties. To learn more about Cash on Cash Return, click on the following link.  
                 Cash on Cash Return
 
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