Send the DSCR, not the LTV: what a multifamily lender is actually reading

On a residential purchase the conversation is about loan-to-value and the borrower's income. On a multifamily loan the centre of gravity moves: the property has to carry the debt on its own, and the lender measures that with debt service coverage — net operating income divided by annual debt service. That changes what belongs in the first email. A package that leads with purchase price and down payment is answering a question the lender asked second. A package that leads with a trailing twelve-month operating statement, a current rent roll and the resulting coverage ratio is answering the first one. It also changes where deals fall apart. An offering memorandum built with an optimistic expense load produces a cap rate that looks fine and a coverage ratio that does not survive the lender's own underwriting — their insurance number, their management fee, their vacancy factor, their replacement reserve. The gap between the two is routinely more than a point of cap rate. Practical order of operations: rebuild the NOI with real quotes before making an offer, compute coverage at the rate you can actually get rather than the rate you hope for, and take the result to the lender first. A deal that clears coverage with room to spare survives an interest rate moving against it. A deal that clears it exactly does not. The rent roll deserves the same scepticism as the expenses: concessions, month-to-month tenants and units occupied by family all show up as income and do not behave like it. This article is general information, not legal, tax or financial advice. Rules change and every deal is different — check your own case with a licensed professional. Alberto Zaltzberg — Adonait · adonait.com