There's a 1.6 trillion in debt coming due by the end of next year, and those people either have to sell or refinance.

Sales are down 75% as a first quarter this year, but it's less second quarter, you know, less sales.

And so sales are way down

refinancing is very very hard right now because these people that had these

adjustable rate mortgages which a lot of people did is called bridge loans

okay it's like it's like it was really like hard money in the single family space and it's very

onerous debt.

I mean it's adjustable rate, it's short term and even if they had a rate cap of say 2%, you know you've got a 20 10 20 30 million

loan a 2% increase in your in your debt is a big deal so that dropped their

It's called debt service coverage ratio in the in the in my world the bank looks at the property's ability to service the debt they don't look at your ability

You don't care what your debt to income is they're gonna going to look at the property's ability to service to debt, and that's the debt service

coverage ratio.

I'll give you a quick example.

So let's say, and it's typically an annual calculation.

Let's say that the property makes 125,000 a year in net income.

Okay, so 125,000 net income.

Let's say the debt's 100,000 a year.

Okay, debts 100,000, incomes 125,000.

That's a 1.25% debt service coverage.

That's typically what banks want to see.

Well, as these interest rates have gone up,

that net income has gone down.

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