Overheard a guy at the coffee shop bragging about his 1.15 DSCR and it got me thinking...

I was grabbing a latte near my office in downtown Nashville and this dude was loudly telling his friend he closed on a 12-unit with a 1.15 DSCR and a 5.25% rate from a local credit union. That seems crazy tight to me... I always thought you needed at least a 1.25 to breathe, but maybe I'm missing something. Anyone else running deals that close to the wire and getting them approved?

2 comments

2 Comments

grayperez8d ago

Man I've been down that same road before and it worked out fine. Closed on a small quad in Knoxville last year with a 1.18 DSCR and honestly the bank barely blinked. Sure the margin is thin but if the rents hold up and you've got some reserves stashed away it's not as scary as people make it out to be.

diana_moore757d ago

Hey @grayperez, just a heads up that DSCR is usually calculated with a minimum of 1.20 for most lenders, but glad your deal went through.