Properties with 5 or more residential units cross the threshold from residential into commercial lending. For investors acquiring 5 to 8-unit boutique apartment buildings in Miami-Dade, Broward, and Palm Beach, small balance commercial DSCR debt offers optimal leverage without corporate red tape.
Commercial vs Residential DSCR Parameters
While 1-4 unit loans evaluate market rents against PITIA, 5-8 unit properties are sized using Net Operating Income (NOI) and cap rates. Typical requirements include a 1.20x commercial DSCR, up to 75% LTV on purchases, and 30-year amortization structures with 5 or 7-year fixed hybrid options.
Value-Add Bridge to Permanent Refinance
Investors acquiring underperforming multifamily buildings with below-market rents often utilize short-term bridge debt to fund renovations, increase occupancy, and then execute a long-term cash-out DSCR refinance once stabilized.
Adler Capital provides seamless bridge-to-perm financing for Florida multifamily properties from $250K to $5M+.
