Why Solid DSCR Deals Still Fall Apart

[Mark Bassali]

After reviewing a lot of dscr files that didn’t make it to the finish line, a few patterns keep showing up:

• Deals that “cash flow” on paper, but don’t qualify under the lender’s rent methodology
• Reserve and liquidity requirements surfacing late and killing momentum
• Assumption that all dscr lenders underwrite the same (they don’t)
• DSCR being forced on deals that still need seasoning or stabilization

The deal itself usually isn’t bad, the structure and lender fit are.

When dscr is matched correctly to the asset, market, and timing, it’s one of the cleanest tools investors have. When it’s not, it’s painful.