What would be a typical demonstrated NOI that Larry should aim for over the mortgage term?

When evaluating the typical demonstrated Net Operating Income (NOI) that Larry should aim for over the mortgage term, it's important to understand how NOI relates to the financial performance of a property and the expectations of lenders or investors.

Aiming for an NOI of $1.30 indicates strong performance and provides a cushion above the mortgage obligations. This means that for every dollar of debt payment, the property is generating $1.30 in net operating income, allowing for expenses, potential vacancies, and unexpected costs while still ensuring profitability. A higher NOI ratio generally reflects effective management, good property maintenance, and the ability to generate adequate revenue to cover operating expenses and debt service.

In real estate, lenders often look for a minimum coverage ratio, typically around 1.25, to ensure that the property can comfortably service its debt. Aiming for an NOI of $1.30 exceeds this threshold, showing financial prudence and an aim for a healthy return on investment. This level of income provides a buffer against potential downturns in the market or unexpected expenses that might arise during the mortgage term.

Thus, aiming for an NOI of $1.30 is considered prudent financial management that not only meets mortgage obligations but also supports the ongoing viability and profitability of the property