$650K Duplex — Does This DSCR Deal Pass?

Let’s break down a real scenario.

Deal Overview

  • Purchase: $650,000
    • Rent: $5,200
    • Loan: 80%
    • Rate: 7.25%

Monthly Breakdown

  • PITIA: ~$4,100
    • Rent: $5,200

DSCR:

≈ 1.27

Initial Verdict

On paper:

Strong.

But Here’s What Matters

  1. Is Rent Real?

If rent drops to $4,800…

DSCR falls fast.

  1. Is Rate Locked?

At 7.75% instead of 7.25%…

This deal weakens.

  1. Does It Pass Stress?

At higher rates:

Does DSCR stay above 1.0?

If not → risk.

Final Thought

A 1.27 DSCR looks strong.

But only if the assumptions hold.