An acquisitions team's first question on a deal with debt is not what the building is worth. It is whether the existing loan can be refinanced, or replaced, at today's rates. This teardown follows one Titleman acquisition underwriting run on a roughly 100-unit apartment building, asked the way an investor or fund would ask it: value, in-place against market income, a debt-stress read, and what to get from the seller before bidding.
The building's name, address, owner and sponsors are withheld. The run took 81 minutes and returned 147 figures, each tied to a record. It does not state a price or a bid; the decision stays with your committee.
The ladder: what the building earns, and what it would need to earn
The existing first mortgage is $43.25 million, fixed near 4%, interest-only, maturing in 2029. The loan's own reporting shows 1.53x coverage for January to June 2026, which matches the 1.53x in the brief.
| Refinance case on the same $43.25 million | Debt service | Coverage on in-place NOI | NOI needed for 1.25x | In-place NOI short by |
|---|---|---|---|---|
| 6.5%, interest-only | $2,811,250 | 0.97x | $3,514,063 | $784,561 |
| 7%, interest-only | $3,027,500 | 0.90x | $3,784,375 | $1,054,873 |
| 6.5%, 30-year amortizing | $3,280,426 | 0.83x | $4,100,533 | $1,371,031 |
| 7%, 30-year amortizing | $3,452,907 | 0.79x | $4,316,134 | $1,586,632 |
In-place NOI here is $2,729,502: the loan reporting's January to June 2026 figure, annualized. Even the market NOI the run built from the building's own leasing, $3,171,829, covers 1.13x at best and 0.92x at worst.
Three findings in dollars
1. The loan works today. It does not refinance. The building is current and covers its loan 1.53x. Refinanced at 6.5% or 7%, in-place NOI covers less than 1.0x in all four cases above. To refinance the existing balance at 1.25x, 6.5% and 30-year amortization, NOI has to reach $4,100,533, which is $1,371,031 a year above what the building earns. A buyer who underwrites to the in-place coverage and not to the refinance is underwriting the wrong test.
2. A tax exemption is worth $720,429 a year of NOI, and its start year is not settled. The exemption holds the taxable assessed value at $271,890 and the tax bill at about $33,823. Without it, today's billable assessment would bill $754,252, and $856,662 once the full assessment phases in. The phase-out comes after the loan matures but inside a buyer's exit horizon. The records differ on the start year (the tax year 2018/19 in one, 2020 in the other), which moves the phase-out by two years. The run flags the exemption letter as the document to get.
3. In-place NOI is $472,895 below the number the loan was written on. At origination the loan was underwritten on NOI of $3,202,397. Today's in-place figure is $2,729,502. Revenue is down $86,117 (to $3,741,132) and operating expenses are up $386,778 (to $1,011,630, from $624,852), or 62%. The in-place number is also a half-year doubled: the full-year 2025 NOI on the loan reporting was $2,420,278, $309,224 lower, and the nine-month and full-year 2025 reports show a weak fourth quarter. Without a T-12 nobody can tell rent growth from seasonality.
What held
The check matters as much for what tied. The reported coverage matched the brief. Occupancy was reported at 98%. The unit count agreed between the loan documents and the tax record. No tax lien, tax delinquency, housing-code violation or marshal eviction is on record. Full-year 2025 net cash flow coverage was 1.34x against a 1.3x cash-management trigger, close enough to note.
What the run could not establish, and what to ask the seller for
- A rent roll and a T-12. None was available, so the $442,327 a year between in-place and market NOI, 11.8% of in-place revenue, is unproven. Each dollar of it the rent roll confirms raises the price that clears a 1.25x refinance; each dollar it does not lowers it.
- Insurance, utility and payroll lines. The loan reporting gives totals only. The building sits in a flood zone, and the only insurance figure on record is from origination.
- The current tax bill and the exemption letter. The tax shown is computed from the roll and a provisional rate.
- A lis pendens and bankruptcy search. Not run on this property.
- The cap rate. The run assumed 5.5%. At the area's 6.83% average, the income-method value is about a fifth lower. Which applies is the main open question on price.
How this was produced
Titleman AI read the address, pulled the records on it and the loan, and built the underwrite in the way an analyst would: every figure linked to the record it came from, the arithmetic recomputed, and the open items listed rather than filled in. It is a first read, not a bid. Titleman is not a broker, an appraiser or a law firm, and what it produces is a draft for a licensed professional to review.
Run it on your own deal
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Prepared by Titleman AI, on behalf of the Titleman team.