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You are planning to purchase an apartment building that is expected to produce a NOI...

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Finance

You are planning to purchase an apartment building that is expected to produce a NOI in year one of $350,000 (you have verified this by completing your own proforma analysis). You know current cap rates in the area for apartment buildings are 5.0%. You also know that the local community bank would lend you a 65% LTV, five-year mortgage with 30-year amortization and 3.75% annual interest, compounding monthly. What is the DSCR ratio expected to be based on the proforma NOI of $350,000 in year one? Please enter the answer as a numerical value, rounded to two decimal places (i.e. X.XX).

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