18-Unit Workforce Housing – Structuring Senior Debt at 43% LTV (Pecos, TX)
I’m working through the capital stack on an 18-unit stabilized workforce housing property in Pecos, TX (Permian Basin) and would appreciate input from investors who have closed similar 5+ unit deals in energy-driven markets.
This is strictly a commercial structure question — not a 1–4 unit DSCR scenario.
Property Snapshot
• 18 furnished units + manager residence
• Built 2017
• Workforce tenancy
• Stabilized operations
• Permian Basin location
Current Deal Structure
• Purchase Price: $800,000
• Appraisal: $1,200,000 (as-is)
• Senior Loan Target: $520,000
• Senior LTV: ~43% of appraised value
• Seller Carry: $280,000
Seller note terms:
• Fully subordinated
• 0% interest
• $1,200–$1,500/month principal payments
• Balloon 36–48 months
Financials
• Normalized NOI ≈ $100,000
• DSCR at requested leverage >2.0x
• Even under stress (~$75K NOI), DSCR >1.6x
From an asset perspective, leverage is conservative.
The Question
For those who have closed small-balance commercial deals in Texas:
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Have you seen regional portfolio banks lend based on appraised value vs strictly purchase price in similar scenarios?
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At 43% senior LTV, how aggressive are banks typically on liquidity requirements?
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In energy markets, how heavily are lenders discounting NOI vs stabilized T-12?
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Would you prioritize regional banks, debt funds, or commercial DSCR lenders for a structure like this?
Not seeking capital — just looking for experienced insight from those who’ve navigated similar commercial financing situations.
Appreciate thoughtful feedback from investors active in West Texas or similar markets.
— Eduardo