Yeah, DSCR numbers can be all over the place depending on who’s crunching the numbers and what they count as “income.” Some lenders will include projected rents, others only use current leases. It’s wild. Always worth asking for their calculation breakdown before you commit.
Title: Choosing Between National and Local Debt Service Coverage Ratio Options
Honestly, I’ve run into that issue more than once—one lender counts future rent from units I haven’t even finished, another acts like the place is empty unless there’s a signed lease in hand. Makes it tough to compare offers side by side. Has anyone actually had a lender walk through their DSCR calculation with them in detail? I’ve asked before and sometimes they just hand over a summary sheet, which doesn’t help much if you want to dig in.
Also, do you guys find national lenders are more flexible on what they’ll count as income, or is it actually the local guys who get creative? I keep hearing both arguments but in practice, I’m not sure I see a clear pattern.
Title: Choosing Between National and Local Debt Service Coverage Ratio Options
I’ve had lenders walk me through their DSCR math, but only after I pushed for it—most just want to send over a one-pager and move on. The last time I really pressed, the underwriter actually hopped on a call and broke down every line item. Turns out, they were using projected rents based on “market comps” that were way higher than what I’d ever get in that neighborhood. When I pointed it out, they just shrugged and said it’s their standard model. Not super helpful if you’re trying to be realistic about cash flow.
In my experience, national lenders tend to stick to their formulas—sometimes they’ll count future rent if you can show a lease-up plan or pre-leasing activity, but they rarely budge from their templates. Local lenders, on the other hand, can be all over the place. I’ve had one local bank count Airbnb income from a property that wasn’t even furnished yet, just because they “knew the area.” Another wouldn’t even look at short-term rental numbers unless I had two years of tax returns.
Honestly, I don’t think there’s a clear winner between national and local. It really depends on who’s sitting across the table and how much risk they’re willing to take on your story. Sometimes the local guys get creative because they know the market better—or maybe they just want your business more. But I’ve also seen nationals come through with better rates if you fit their box.
One thing I always ask now: “Can you show me exactly what you’re counting as income and how you’re calculating expenses?” If they can’t answer that in detail, I move on. Too many surprises otherwise.
Curious if anyone’s actually gotten a lender to adjust their DSCR calculation after pointing out something off? Or is it always take-it-or-leave-it?
I’ve tried pushing back on DSCR numbers before—usually just get a polite “this is our policy” and that’s it. Once had a local lender tweak their expense assumptions after I showed actual utility bills, but that felt like a unicorn moment. Most of the time, it’s take-it-or-leave-it, especially with the big guys. The whole “market comps” thing drives me nuts... like, sure, maybe my place could rent for that if it came with a free Tesla.
I get what you’re saying about the big lenders being rigid, but have you ever tried working with a credit union? I’ve found they sometimes look at the whole picture, not just cookie-cutter comps. Maybe not always, but it’s been less frustrating for me. Curious if you’ve had any luck there?