This takes a little more work, but it's the fairest and reduces the likelihood of tenants that squander utilities.If you choose #2 or #3, there are considerations:Start with an average.

It's an asset based loan so most all the requirements will be dependent on the rent covering the debt so if you have cash but no stream of income it'll be the way to go.

This benefits the buyer more, since depending on how it is written, it can lock in a future price and if the buyer would benefit from exercising the option he may, if the numbers run against him he can back out. 

Lenders may adjust loan terms, such as loan-to-value ratio and interest rates, to accommodate varying DSCR ratios.Challenges and ConsiderationsWhile DSCR loans offer numerous benefits, borrowers should be aware of potential challenges and considerations:Market Conditions: DSCR requirements may vary depending on market conditions, property type, and lender preferences.

So the answer really depends on the areas you are considering.

With that, we became the American Association of Private Lenders—and we began spreading the word.Finally, Some DefinitionsUnderpinning the concept of minimizing the use of “hard money” in our industry is a recurring theme of standardization—that the root of the issue is too many interpretations of what the same terms mean.We offer up the following definitions for discussion, debate, fine-tuning, and eventual consensus [last updated 5/9/2022]:Private lender: Any non-depository individual or entity that primarily originates business-purpose loans secured by hard assets, generally real estate.Hard money lender: A subset of private lender where creditworthiness is determined solely by the securing real estate collateral.Correspondent lender: A subset of private lender where the closed loan is sold to investors.Portfolio lender: A subset of private lender where the closed loan remains in the lender’s portfolio.Fund manager: A subset of private lender where, depending on the fund structure, the deployed capital is sourced by offering exempted securities to accredited and occasionally non-accredited private investors.Private investor: An individual or entity that seeks a return by deploying capital through a private lender or fund; the investor may or may not be named on the loan’s promissory note.Private money broker: Any individual or entity that acts as an intermediary between a borrower and a private lender without directly originating the loan.

@Carolyn McBride this is HIGHLY dependent on where you are in the country. 

It really depends on the amount of rentals you manage.

If you choose Vegas go with SFR. 

It depends on how/if you want to deal with property management.