Key takeaways
- Test 3 scenarios: rate, vacancy, price.
- DSCR coverage at +200 bps.
- Vacancy spike to 15%.
- Price decline 20%.
- Reserves cover the worst case.
Core concepts
Rate scenario
+200 bps refi cost.
Vacancy scenario
15% market vacancy.
Price scenario
20% decline.
Step-by-step framework
- 1Run 3 scenarios.
- 2Identify weak link.
- 3Build reserves or refinance.
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Common mistakes to avoid
- Skipping stress test.
Frequently asked questions
Scenarios?
Rate + vacancy + price.
Frequency?
Annual + after major event.
Worst case?
Combined scenario.
Reserves?
Cover 12 months PITI under stress.
Action checklist
- ☐Three scenarios.
- ☐Annual + post-event.
- ☐Reserves stress-tested.
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