PRETTY BOI ESTATES™
Recorded Price vs Premium Value — 10% Interest-Only Lender Edition
Every Pretty Boi Estates™ acquisition is built to withstand high-rate environments.
This model does not rely on cheap debt — it relies on income dominance and escrow control.
When rates are 10% interest-only, structure matters more than ever.
1 ■ RECORDED PRICE = STRUCTURAL FLOOR
• Fixed at 45% of FMV
• Appears on HUD, deed, and county record
• Controls taxes, title insurance, and lien exposure
• Creates low recorded leverage, even with higher rates
• Never recalculated due to NOI, premium, or lender terms
Example:
FMV: $3,170,000
Recorded Price (45%):
→ $3,170,000 × 0.45 = $1,426,500
Taxes, title, and legal risk are calculated on $1.43M — not the income value.
The recorded price is the legal floor, not the income ceiling.
2 ■ LENDER POSITION — 10% INTEREST ONLY
• Lender position capped at 24% of FMV
• Loan is interest-only, no amortization drag
• High DSCR protects lender even at elevated rates
Example Loan:
FMV: $3,170,000
Lender @ 24%:
→ $3,170,000 × 0.24 = $760,800
Interest-Only Payment @ 10%:
→ $760,800 × 0.10 = $76,080 / year
→ $6,340 / month
No principal burn. No balloon pressure. Clean serviceability.
3 ■ PREMIUM VALUE = NOI & LENDER STORY
Premium Value is where high-rate deals are won.
• Not recorded on title
• Used only for NOI justification and underwriting
• Shows why a 10% IO loan is still over-collateralized by cash flow
Premium Ranges (unchanged):
Asset Class Premium Range
Luxury Estates (8+ BR) 30–60%
SFR / Corporate Stays 20–30%
Multifamily 10–15%
RV / MHP 10–15%
Hotels / Resorts 25–40%
Luxury Estate Example (+40% Premium):
FMV: $3,170,000
Premium Value:
→ $3,170,000 × 1.40 = $4,438,000
This is the earning value, not the tax value.
4 ■ DSCR AT 10% — WHY THE DEAL STILL CLEARS
Assume conservative Day-1 NOI:
NOI: $540,000 / year
Debt Service @ 10% IO: $76,080 / year
DSCR:
→ $540,000 ÷ $76,080 = 7.1× DSCR
This is why rate fear doesn’t apply here.
• DSCR remains institutional-grade
• Payment coverage is extreme
• Refinance optional — not required
5 ■ HOW RECORDED + PREMIUM WORK TOGETHER (HIGH-RATE EDITION)
• Recorded price keeps paper risk light
• Premium value justifies NOI dominance
• Title disburses only from the recorded pool
• Lender underwrites to income and premium
• 10% IO becomes irrelevant when DSCR > 5×
We don’t need cheap debt.
We need controlled paper and overwhelming income.
6 ■ TALK TRACK — UPDATED FOR 10% IO LENDERS
“We intentionally structure at a low recorded price so taxes, title, and liability stay light.
The lender underwrites to the premium value because that reflects the true earning power.
Even at ten percent interest-only, the income covers the debt many times over.
The deal doesn’t depend on rates — it depends on operations.”
7 ■ INTERNAL RULE — UNCHANGED, RATE-PROOF
• Recorded Price: fixed
• Premium: story only
• Disbursements: from escrow
• Rates: absorbed by NOI
• Refinancing: optional leverage, not survival
Structure over sacrifice.
Stewardship over struggle.
Every deal builds legacy.