How do you approach tight DSCR when the deal has strong real estate collateral?

searcher profile

September 16, 2025

by a searcher from Wayne State University in Detroit, MI, USA

Curious to hear how other searchers have navigated deals where the operating DSCR is on the lower end of lender comfort, but the underlying real estate is very strong (think self‑storage or similar asset‑heavy sectors). Have you seen lenders get more flexible on leverage/terms when collateral coverage is strong? From an equity perspective, how do you frame the opportunity to LPs when the cash flow is tight initially, but modernization and roll‑up potential is real? Would love to hear perspectives from those who’ve been in this situation.
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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
I would be happy to look at the deal and provide feedback. It is hard to give a general answer as the answer can verify quite a bit based on the deal and collateral type. You can reach me here or directly at redacted
commentor profile
Reply by a professional
from University of Michigan in Detroit, MI, USA
Hi ^redacted‌, I recommend speaking with ^redacted‌. From my experience, purchasing real estate along with a business is often difficult for the exact issue you raise. We've had some clients look at third-party sale leasebacks for that reason. Let me know if you want to discuss your deal more broadly. I see that we're both Detroit based. Happy to grab a coffee sometime. Reach out at redacted
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