Or have you seen smaller portfolio lenders structure loans this small when collateral is strong?

No, it was secured but apparently he used the same collateral for every loan he took out.  

Here in California, there are lenders that look at the collateral itself, and not necessarily the borrower's credit profile.

Weak collateral?

This happens more often with small multifamily than people expect — lenders aren’t just looking at price, they’re looking at how the exclusions affect collateral protection.Even if the broker says it’s “cosmetic roof only,” underwriting is asking a different question:If there’s storm damage, is there any scenario where the lender’s security (the structure) isn’t fully covered?

He might not want to do it if his bank requires him to cover for the guarantee with cash collateral.

Update ive actually found a apartment complex that looks promising so I am looking into doing a cross collateral dscr loan using my free and clear SFR as the down payment. 

Despite multiple assurances of a secured investment, the loan agreement lacks any mention of collateral.When pressed about the lack of promised collateral, Mr.

., because it seems completely backwards compared to how lenders operate in Europe.Let me explain the situation.I currently own a rental property in Decatur, IL:419 E Peoria Ave• Purchased Sept 2025 via Agreement for Deed• Purchase price: ~$56,900• ~$6K down• Currently rented at $1,200/month since October• Tenant occupied• Current payment to seller: $744/monthBased on nearby sales and the fact the property is fully rent-ready, we believe the market value should be somewhere around $70K–$90K.The plan is to refinance the property with a DSCR loan (70–75% LTV) and pay off the seller.At the same time we are also looking at purchasing two additional SFRs in the same market around $50K–$55K each, with expected rents around $1,100–$1,200/month.Here’s where things start to get confusingOne lender suggested the following structure:“Increase the purchase price to $62,500 so we can lend $50K.”From an investor perspective this makes zero sense to me.In Europe the lending logic is simple:If a property appraises for €80K but you buy it for €50K, the bank simply lends based on the appraised value, because the investor created instant equity through negotiation.In other words:Value: $80KPurchase price: $50KLoan: ~70% LTV of value (~$56K)This is actually encouraged, because the lender has more collateral coverage.My question for U.S. investors and lendersIs it normal in the U.S. that DSCR lenders focus on purchase price instead of value?

If youre providing funds for closing on the initial deal but dont have your loan closed at the time of funding, meaning the borrower doesnt sign the promissory note and pledge the collateral via a mortgage/deed of trust as part of the transaction where the debt is created in exchange for receiving the funds, then at best youre unsecured, and you may not even have a loan at all.