Combined rent, one payment
With a small multifamily property, the DSCR calculation adds the rent from every unit and compares the total to the single monthly payment. That is often what makes these buildings attractive to investors: one vacancy hurts, but it rarely sinks the whole property.
Underwriters will want to see each unit’s rent individually. A rent roll that lists unit number, tenant status, lease dates and monthly rent is the easiest way to present it. The appraiser will also estimate market rent per unit, and some programs use the lower of the two figures.
Business purpose only
One point deserves emphasis. Living in one unit and renting the others is an owner-occupied arrangement, and that is outside what we arrange. Every unit financed through DSCR Loan App must be non-owner-occupied investment property.
If the building is fully rented to tenants and you live elsewhere, a 2-4 unit property is a great fit for the scenario builder. Enter the combined rent and the full expense picture, including any utilities you pay as the owner.
Common questions
Can I live in one of the units?
Not with financing we arrange. DSCR loans through DSCR Loan App are for non-owner-occupied investment property only, so no unit can be your residence.
What if one unit is vacant right now?
Many programs can work with partial vacancy using market rent from the appraisal, though treatment varies. Note the vacancy in your scenario.