Answer
What is DSCR on a multifamily loan?
DSCR (Debt Service Coverage Ratio) is Net Operating Income divided by annual debt service. Multifamily lenders require a minimum DSCR — typically 1.25x for agency debt, 1.20x for aggressive bridge, 1.30–1.35x for conservative bank debt. It's the primary constraint on loan size in a rising-rate environment.
Why DSCR caps deal size today
With rates elevated, DSCR often caps loan-to-value below the LTV maximum. Buyers effectively have less leverage than they did in 2021 — which shifts price accordingly.
How sellers help
A cleaner T-12 with defensible NOI supports higher DSCR sizing, which supports higher buyer offers. Sloppy operating statements shrink loans and shrink offers.
Local context
This answer reflects how deals actually trade in Cameron Samimi's core coverage area: the South Bay (Torrance, Redondo Beach, Hawthorne, Lawndale, Gardena, El Segundo), Long Beach (Alamitos Beach, Belmont Heights, Wrigley, Bixby Knolls, Downtown), and Westside LA. Pricing, rent regulation, and buyer depth differ materially between these submarkets — verify the specifics for your property before acting.
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