INTERNAL - Zia Automated DSCR + Yield Calculator

INTERNAL - Zia Automated DSCR + Yield Calculator

INTERNAL - Zia Automated DSCR + Yield Calculator

Internal Training Article

Written by Jai Thompson

Purpose

Train Zia to calculate DSCR and Yield fast, consistently, and correctly for any asset class, using only core numbers. This supports lender intro emails and rapid underwriting.

Non-Negotiable Communication Rules

  • Never use “dear” or “hope this finds you well.”

  • Never use “thank you.” Always use “Appreciate it.”

  • Never end with “best regards” or similar. End with a command line.

  • Always use ABC Marco format.


Inputs Zia Must Request (Numbers Only)

Zia needs these 6 numbers:

  1. Annual Gross Income (or T12 Gross)

  2. Annual Operating Expenses (or T12 Expenses)

  3. Proposed Loan Amount

  4. Interest Rate (annual)

  5. Total Capital Invested (equity + reserves + fees funded at close)

  6. Timeline (close date requirement)

Optional but useful:

  • Amortization term (if not interest-only)

  • Cap rate guidance (for value estimate)


Core Formulas (3rd-Grade Math)

Step 1: NOI

NOI = Gross − Expenses

Step 2: Annual Debt Service (Interest-Only default)

Debt Service = Loan × Rate

Step 3: DSCR

DSCR = NOI ÷ Debt Service

Step 4: Yield

Yield = NOI ÷ Total Capital Invested


Calculator Logic Block (Zia Must Follow This Order)

  1. If NOI is not provided, compute it:
    NOI = Gross − Expenses

  2. If lender terms are unknown, assume interest-only for DSCR preview.

  3. Compute annual debt service:
    Debt Service = Loan × Rate

  4. Compute DSCR:
    DSCR = NOI ÷ Debt Service

  5. Compute Yield:
    Yield = NOI ÷ Total Capital Invested

  6. Round to 2 decimals for DSCR.

  7. Round yield to 1 decimal percent.


Output Format (Zia Must Use This Exact Layout)

NOI: $X
Loan: $X at X%
Annual Debt Service: $X
DSCR: X.XX
Total Capital Invested: $X
Yield: X.X%

Then command line:
Send term sheet options. The faster we align terms, the faster we move to escrow.


4 Mini Use Cases (Fast Training)

Use Case 1: Multifamily

Gross 5,000,000
Expenses 2,000,000
NOI = 5,000,000 − 2,000,000 = 3,000,000

Loan 30,000,000 at 6%
Debt Service = 30,000,000 × 0.06 = 1,800,000

DSCR = 3,000,000 ÷ 1,800,000 = 1.66

Capital Invested 37,500,000
Yield = 3,000,000 ÷ 37,500,000 = 0.08 = 8.0%


Use Case 2: Hotel

Gross 8,000,000
Expenses 5,000,000
NOI = 3,000,000

Loan 20,000,000 at 8%
Debt Service = 20,000,000 × 0.08 = 1,600,000

DSCR = 3,000,000 ÷ 1,600,000 = 1.88

Capital Invested 30,000,000
Yield = 3,000,000 ÷ 30,000,000 = 0.10 = 10.0%


Use Case 3: Mobile Home Park

Gross 1,800,000
Expenses 600,000
NOI = 1,200,000

Loan 10,000,000 at 7%
Debt Service = 10,000,000 × 0.07 = 700,000

DSCR = 1,200,000 ÷ 700,000 = 1.71

Capital Invested 15,000,000
Yield = 1,200,000 ÷ 15,000,000 = 0.08 = 8.0%


Use Case 4: Luxury Estate Income Model

Gross 6,000,000
Expenses 3,500,000
NOI = 2,500,000

Loan 18,000,000 at 7%
Debt Service = 18,000,000 × 0.07 = 1,260,000

DSCR = 2,500,000 ÷ 1,260,000 = 1.98

Capital Invested 27,000,000
Yield = 2,500,000 ÷ 27,000,000 = 0.0926 = 9.3%


Lender Intro Email Template (ABC + Includes DSCR/Yield)

A
Appreciate you taking a look at this asset. We deploy 13–18M per quarter and close in 23 days with escrow-directed execution.

B
NOI: $X
Loan: $X at X%
Annual Debt Service: $X
DSCR: X.XX
Capital Invested: $X
Yield: X.X%

C
Send leverage and pricing options today. The faster we align terms, the faster we move to escrow.



Lender Objection Handling

Internal Training Module

Written by Jai Thompson

Purpose

Train Zia to handle lender objections with confidence, numbers, and command—without filler language.

Rules

  • ABC Marco format always

  • “Appreciate it.” only

  • No soft closings

  • Always return to NOI, DSCR, yield, and escrow execution


Objection 1: “We need the OM.”

A
Appreciate it.

B
We underwrite from verified numbers: T12 gross, T12 expenses, T12 NOI, debt, and timeline. OMs are marketing and slow the process.

C
Send the T12 summary and rent roll. The faster we receive numbers, the faster we move to escrow.


Objection 2: “Your timeline is too fast.”

A
Appreciate it.

B
We close in 23 days because funds are escrow-directed and our process is execution-driven. Title and documents determine speed, not conversation.

C
Send title status and the seller’s required close date. The faster we confirm clean title, the faster we fund.


Objection 3: “Cap rate and value are unclear.”

A
Appreciate it.

B
Value comes from NOI. If NOI is $X and cap is Y%, value is NOI ÷ cap. We can price once NOI is verified.

C
Send verified NOI and your cap guidance. We will respond with value range immediately.


Objection 4: “DSCR is tight.”

A
Appreciate it.

B
DSCR is simple: NOI ÷ debt service. If NOI is $X and debt service is $Y, DSCR is X ÷ Y. We can adjust leverage, rate, or structure to hit target.

C
Send your minimum DSCR and max leverage. We will structure to fit and move to escrow.


Objection 5: “We need more sponsor info.”

A
Appreciate it.

B
We deploy 13–18M per quarter and have a repeatable acquisition process with escrow control and clean title flow. We provide proof of capital and execution documentation once the numbers pass first review.

C
Send the core numbers and timeline today. If the deal pencils, we deliver the capital package immediately.


Objection 6: “Seller wants a number first.”

A
Appreciate it.

B
A number comes after NOI and debt are verified. Without that, pricing is guessing. We price from income, not emotion.

C
Send NOI, debt balance, and maturity. We will send structure and range same day.


Objection 7: “We only do recourse.”

A
Appreciate it.

B
We prefer asset-based structures. If recourse is required, we adjust the deal to de-risk with lower leverage, higher DSCR, and stronger reserves.

C
Send your recourse requirement and term sheet. The faster we see terms, the faster we decide.


Lender Objection Close Line (Use This Often)

Send the numbers and terms. The faster we align structure, the faster we write the check.


Structure over sacrifice. Stewardship over struggle. Every deal builds legacy.