Calculate debt service - interview
if anyone could explain how to calculate the debt service, I would appreciate it:
You buy a property: Value is $100,000. Cap rate 5%. (so NOI is $5,000).
Bought it at 80% LTV.
Cash-on-cash is 10%.
What is your debt service?
I would assume:
20 % Equity = 20,0000
NOI = 5,000
Debt services = 3,000
Free cash flow = 2,000
Cash-on-cash = 2,000 / 20,000 = 10 %
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