Totally get what you're saying about analogies—they can muddy the waters more than clear them sometimes. Had one lender try explaining DSCR as a garden hose and water pressure...I mean, I sorta followed, but it felt unnecessarily complicated. Honestly, once you show you're comfortable with the numbers, lenders usually drop the weird comparisons and just talk straight. Still, I guess anything beats awkward silence when they're trying to simplify something tricky.
"Had one lender try explaining DSCR as a garden hose and water pressure...I mean, I sorta followed, but it felt unnecessarily complicated."
Haha, I've heard some pretty wild analogies myself—garden hoses, traffic jams, even pizza slices (seriously). But honestly, do these analogies ever really help anyone grasp DSCR better? I feel like most borrowers just want to know: "Am I making enough rental income to comfortably cover my loan payments?" Simple as that.
Have you noticed lenders tend to drop the analogies once they see you're comfortable with the actual numbers? It's like they're testing the waters (no pun intended) to see how much hand-holding you need. Once they realize you're good with the math, suddenly it's all straightforward talk about NOI and debt payments.
Maybe it's just me, but I'd rather spend five minutes breaking down the actual calculation than ten minutes untangling a weird metaphor...
I had a lender once try to explain DSCR using a car engine analogy—something about RPMs and fuel efficiency. Honestly, it just made things more confusing. I politely stopped him halfway through and asked if we could just look at the numbers directly. Once we shifted to actual figures—rental income, expenses, and loan payments—it clicked immediately.
In my experience, analogies can sometimes muddy the waters rather than clarify them. Most borrowers I've worked with appreciate straightforward explanations. If you clearly outline net operating income and debt obligations, the concept becomes intuitive pretty quickly. I think lenders often default to analogies because they're unsure how comfortable their client is with financial terms. Once they see you're fine with the math, they usually drop the metaphors and get straight to the point.
"In my experience, analogies can sometimes muddy the waters rather than clarify them."
I get your point, but don't you think analogies can sometimes help bridge the gap for people who aren't numbers-oriented? I've had clients whose eyes glaze over the second I mention NOI or debt obligations. A simple analogy—maybe not car engines, but something relatable—can ease them into the concept before diving into the math. Maybe it's about picking the right analogy rather than ditching them altogether...
Analogies can definitely help, but the trick is keeping them short and sweet. When I refinanced using a DSCR loan, I compared NOI to monthly take-home pay—clients instantly got it. Maybe skip overly technical analogies and stick to everyday stuff people already understand.
