I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

David Dachtera excellent illustration with the train.

An example will illustrate the problem.

This one is huge and pretty easy to illustrate.  

For illustration, let’s assume my series LLC’s legal name is MY CRE HOLDINGS CO., LLC, and let’s assume my first series is 123 MAIN ST., LLC, an individual series of MY CRE HOLDINGS CO., LLC, a Texas series LLC.

Curruthers illustrates how trust, communication, and mutual respect are essential elements in fostering these connections.

This is basically how bored tax geeks entertain themselves, nothing mean or personal.This picture illustrates our mini-debate regarding IRS publications quite well.

For illustration purposes I am completing site work in advance of vertical construction on two parcels directly next to a single family home I’m renovating.

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = $2300/$1875 = 1.23DSCR lenders generally let you vest either individually or as an LLC.

Grasshopper, the arbitrary numbers are for illustrative purposes ONLY!