Understanding how private underwriters calculate DSCR allows investors to pre-screen deals in seconds before making acquisition offers.
The Standard DSCR Equation
Formula: DSCR = Gross Monthly Rental Income ÷ Monthly PITIA (Principal + Interest + Property Taxes + Hazard/Flood Insurance + HOA Fees).
Worked Example
Gross Rent: $3,800/mo. Principal & Interest: $2,200. Property Taxes: $450. Insurance: $300. HOA: $50. Total PITIA = $3,000. DSCR = $3,800 ÷ $3,000 = 1.267x (Tier 1 Pass).
Instant automatic DSCR calculation is built into the Deal Hub at hub.adlercapital.us.
