Closing at 7.2% DSCR shocked me after 4 straight denials

Everyone says 1.25 DSCR is the magic number, but I finally closed a small strip center in Dayton at 7.2% with a 1.19 ratio because the lender liked the tenant mix. Anyone else find that underwriters bend the rules more than people admit when the property story is solid?

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davidh882d ago

...and honestly that 1.25 number gets treated like gospel when it's really just a starting point. Question for you though, how much did the tenant mix actually carry the deal versus the rate? Like, did they bake in a higher rent coverage assumption based on who signed the leases, or was it more that the strip center had zero vacancy and they just felt safe? Because I've seen underwriters flex on the ratio when the cash flow math is boring and predictable, but 7.2% still feels high unless the spread over the current treasury rate was wide. Was the lender a local bank or a bigger shop that had quota to hit? That usually tells you a lot about how bendable the rules really are.