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).

Such a situation is recoverable if there is enough time for a market recovery and the cash flow is at least break-even (or there is enough reserve cash to cover negative cash flow until it can turn positive). 

Holding investor funds without a clear and reliable process for withdrawal reflects poorly on RAD’s reputation and calls into question the ethical nature of its practices.

Low cash flow requires larger reserves.  

Focus on fundamentals: buy below market value, have strong cash flow (or a clear path to creating it), and maintain sufficient reserves to weather any unexpected challenges.If you’re strategic and stay patient, this market could create opportunities that lay the groundwork for long-term success.

That being said if you are willing to start with a smaller property or have more cash reserves than we did as we were preparing for our wedding you can make the deals happen you just have to be creative with it. 

I talked with Chris Sadler at Reva and to stay in theDST will mean no payments at all because the money will go to reserves for a unknown future.And to sell DST will only bring about a little more than 50 cents on the dollar. 

I then would have my tax cpa enter in or do it after discussing tax based items (depreciation- MACRS, reserves, year end accruals, reserves, etc.).

This along with a multitude of other issues ate through every bit of reserves we had before we made much of a dent in these rehabs.

These costs for most of the individuals are considered personal in nature (unless you have a RE portfolio that is run like a business; see below).