Debt Yield
Debt yield measures loan risk by dividing a property's NOI by the loan amount, showing a lender's return if it had to take the property back and sell it. It's used as a floor test that isn't affected by interest rates the way DSCR is.
Example
A property with $650,000 in NOI and a $6,500,000 loan has a 10.0% debt yield.
Formula
NOI ÷ Debt Yield % = Max Loan Amount on Debt Yield
Excel Formula:
=B8/B11
B8= NOIB11= Loan Amount
Related tool
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