DSCR negative cash flow
A ratio below 1.00 means rent does not cover the entered monthly payment total. Do not hide the shortfall behind appreciation. Use the rent-gap output to see the monthly fix required at your target ratio.
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Check DSCR, cash flow, cap rate and financing risk before you make an offer.
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What do you need to test?
Most usedDSCRCan rent cover the debt?
Cash FlowSee the real monthly profit.
Cap RateCompare property yield.
LTVCheck the loan percentage and owner equity.
Flip / BRRRRFind your maximum offer.
Hidden costs can turn a good deal negative. Start with the lender ratio, then verify the property's full operating cash flow.
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Stress-test the debt before a lender pulls your credit
Enter the actual rent, mortgage, taxes, insurance and HOA. Then cut rent or raise costs to expose the deal's break point.
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Four places investors get surprised
Appraiser 1007 rent schedule shortfalls
Your lease is not always the rent a lender uses. If the 1007 market-rent schedule comes in light—or the lender applies a lender rent reduction—the DSCR can fail even when the tenant pays on time.
Delayed financing exception math
Buying cash and refinancing quickly changes the payment you enter here, but it does not rewrite DSCR. Confirm seasoning, source-of-funds and eligible loan-basis rules with the actual lender before treating cash as recycled.
The Bexar County property-tax trap
The seller's tax bill may reflect a lower assessed value or exemptions you will not keep. Re-run the deal with a purchase-price tax estimate and use the tax stress field. Verify the final number with official county records.
The math
What this screen actually calculates
Stressed DSCR = stressed monthly rent ÷ full monthly debt service. Total monthly housing payment here includes principal, interest, taxes, insurance, HOA and other fixed obligations you enter. Tax and insurance stress applies only to those two fields.
Lenders may use actual lease rent, a percentage of appraiser market rent, PITIA or a program-specific expense method. Match your inputs to the lender worksheet before relying on the result.
| Stressed DSCR | Working read |
|---|---|
| Below 1.00 | The property does not cover the modeled debt. |
| 1.00–1.19 | Covered, but thin; exceptions may cost leverage or rate. |
| 1.20–1.24 | Near a common cutoff; small input changes matter. |
| 1.25+ | Passes a common first screen, not a loan approval. |
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Quick answers
Common DSCR questions
Can a DSCR loan have negative cash flow?
It can, but a property with income below its full monthly debt service has a DSCR below 1.00. Approval then depends on the lender's program, leverage, reserves and other compensating factors; the property is not covering its debt from rent.
Is a DSCR loan the same as a no-ratio loan?
Not exactly. DSCR programs generally qualify the property using rental income versus debt service instead of the borrower's personal debt-to-income ratio. Some lenders market this as no-income or no-ratio, but property cash-flow, credit, reserves and LTV rules still apply.
How should I underwrite property taxes in Bexar County, Texas?
Do not rely only on the seller's current tax bill. Test the purchase price against the applicable local tax rate and verify exemptions, assessed value and possible post-sale changes with official county sources. This calculator lets you stress the monthly tax input.
Does delayed financing change DSCR math?
The DSCR formula does not change, but the new loan payment and eligible loan amount change the debt-service side. Delayed-financing eligibility and cash-out limits are separate lender or agency rules that should be confirmed before closing.