By Munoz Ghezlan & Co. Alternative Capital | Strategic Finance | Private Wealth
At Munoz Ghezlan & Co., we structure capital with precision — and few tools offer the kind of leverage and flexibility that DSCR lending does for real estate investors. Yet despite its growing popularity, many investors misunderstand the deeper strategic applications of these products — especially in a market where traditional lending is constrained.
This guide serves as a primer for experienced operators and emerging investors alike — not only explaining how DSCR loans work, but how to leverage them intelligently as part of a broader portfolio strategy.
What Is a DSCR Loan?
A Debt Service Coverage Ratio (DSCR) loan is a type of real estate financing where the lender qualifies the deal based on the income-generating power of the property — not the personal income of the borrower.
Instead of W-2s, tax returns, or P&Ls, DSCR lenders look primarily at:
DSCR = Net Operating Income (NOI) / Debt Service
A DSCR of 1.25x, for example, means the property's cash flow covers 125% of the monthly loan
payments — a comfortable buffer.
Why This Matters for Investors
DSCR loans are a liberating tool — especially for operators who:
➢ Own multiple properties and are capped out on conventional loan limits
➢ Are scaling through LLCs or trusts
➢ Want to leverage real estate professionally without tying up personal credit
➢ Need flexibility for repeat transactions or portfolio refinancingUnlike banks, which often require full income verification, DSCR lenders focus on the asset, not
the individual.
What Makes Our DSCR Loans Different
At Munoz Ghezlan & Co., we don’t just originate DSCR loans — we engineer capital stacks to
fit investor objectives.
Key features of our DSCR products:
➢ As low as 10% down
➢ 30-year fixed or interest-only options
➢ No personal income verification
➢ Approval based on rent projections or current leases
➢ Closings in as little as 10–14 days
➢ CLTV structures up to 90% with layered capital (for qualified borrowers)
This is not "check-the-box" lending. It’s precision financing for serious operators.
DSCR in Action: A Case Example
A client recently approached us seeking to acquire a portfolio of 4 rental properties. Conventional financing required 25% down — locking up over $180,000 in equity.
Instead, we structured a 10% down DSCR loan using market rent projections and layered in a working capital line to bridge the remaining closing costs.
Net result: The investor closed on $1.2M in property with just $120K out of pocket, preserving liquidity and keeping other acquisition lines open.
Common Misconceptions
1. “DSCR loans are only for perfect properties.”
False. We regularly finance value-add rentals, BRRRRs, and transitional assets — as long as the numbers work.
2. “You need a 1.25x DSCR minimum.”
Not always. Depending on the deal structure, we may approve loans as low as 0.75x DSCR with reserves or layered funding.
3. “DSCR is only for single-family homes.”
Our platform supports SFRs, duplexes, small multifamily (2-8 units), and portfolios.
The Strategic Advantage
DSCR lending isn’t just about qualifying for more debt — it’s about accelerating wealth-building by using the asset’s own income to drive future leverage.
Used correctly, it becomes the foundation of:
➢ Portfolio scaling strategies
➢ Equity recycling through cash-out refinances
➢ Exit flexibility via long-term fixed-rate products
➢ Professional-grade underwriting that aligns with private equity standards
Final Thoughts
In a high-rate, high-volatility environment, investors need capital partners who understand the nuance behind the numbers.
At Munoz Ghezlan & Co., we don’t just fund deals — we help you structure long-term growth. Our DSCR programs are designed for serious investors who want to scale efficiently, preserve liquidity, and operate with precision.
Looking to structure your next acquisition?
Contact our Capital Desk to discuss DSCR eligibility, term sheets, and layered financing
strategies tailored to your portfolio.
