CRE DSCR Bridge Loan Default Engine.

## The Math of the Hand-Back

In 2021, real estate syndicators bought massive apartment blocks using 3-year "Bridge Loans" with floating interest rates starting at 3.5%. The mathematical goal was an initial DSCR (Debt Service Coverage Ratio) of 1.5x—meaning the property generated $1.50 in rent for every $1.00 paid to the bank.

### FAQ

**Q: Why are massive syndicates going bankrupt if their buildings are 100% occupied?**
A: When the Federal Reserve hiked interest rates, those floating Bridge Loans adjusted from 3.5% to 8.5%. The building's rent (NOI) did not triple to match the bank payments. Suddenly, the DSCR crashes below 1.0x. The building generates less money than the bank requires every month. The owners must literally pay thousands of dollars out of their own pockets every month just to keep the building, forcing them to ultimately default and trigger foreclosure.