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You are considering the acquisition of Colony Park Apartments. Colony Park is a $12-$unit apartment complex that is up for sale in the amount of $$1,200,000.$ You plan to purchase this property with debt. The $12-$unit apartment complex is expected to generate gross scheduled rent in the amount of $$16,287$ per month. Additionally, you rent $5$ parking spots for an additional $$105/$month each. Your property has a $8\%$ vacancy loss $($which we deduct as a proportion of gross scheduled rent for the purposes of determining NOI$)$ and $$2,300$ in monthly operating expenses. Given you have $12$ units and only $5$ parking spots, you are comfortable assuming no parking vacancy during the holding period. Lastly, at the end of year $15$ you plan to sell the property at market value. You expect the property to appreciate $7\%$ per year.

You plan to purchase this property using a partially amortized loan at a contract interest rate of $7\mathrm{.}5\%($interest compounds monthly$).$ The initial loan partially amortizes for $5$ years, requires $$6,900$ in origination fees, and assumes you place $25\%$ down on the property $($meaning $$275$k down$)$ and that you thus finance the remaining $$900,000$ with the lender. The initial loan is structured such that at the end of $5$ years, you owe a balloon in the amount of $$500,000$ which you plan to refinance into a new loan. At the time of refinance, you expect market interest rates to be at $9\mathrm{.}5\%$ and you also expect to be able to secure a loan on the remaining balance of your previous loan $($which in this case is the $$500,000$ balloon owed at maturity$).$ This new loan, which would require $$5,800$ in origination fees, partially amortizes for $10$ years. At the end of maturity, you will face a balloon in the amount of $$228,000.$

What is the DSCR $($or DCR$)$ for the initial loan? Enter this value as a number NOT a percent. For instance, if your LTV is $\mathrm{.}68$ write $\mathrm{.}68$ below. round to two decimals.

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