Lender · Albermarle, NC · Member since 2025 · 237 posts · 90 votes
I've noticed more landlords moving away from traditional income-heavy lending and focusing more on property cash flow structures like DSCR thinking. Has this changed how you evaluate rental properties or scale your portfolio?
I help a lot of my investors with DSCR loans. I think the biggest thing is underwriting them before acquisition to make sure they will cover DSCR ratios. Most products want you to be at least 1.0 but pricing typically gets noticeably better when over 1.1 and even better over 1.25.
If they aren't going to hit a DSCR products ratios then it won't be an option and they have to either go with bank statement loans (if business owner we also do this a lot) or your lending typical route. So knowing this up front and underwriting conservatively to hit those metrics is key.