Grow your real estate investing business with the most competitive and transparent private lender for bridge loans (hard money, fix & flip, rehab, ground up construction), DSCR rental loans.

Private Lender for DSCR Loans and Fix & Flip Loans | OfferMarket

Private Lender for DSCR Loans and Fix & Flip Loans

Gross Annual Rent ÷ Current Market Value

 

Gross Rent is the total rent revenue collected. Current Market Value is the appraised or estimated value based on comparable properties (comps). Gross Yield does not consider expenses or taxes. Also referred to as Gross Rental Yield, this metric is a good starting point for rental property investors to determine the attractiveness of a rental property investment relative to other similar options in a given market.

 

### Example
If you own a single family rental property with $10,000 per year in gross rent (total rent) and the house is worth $100,000, your gross yield is 10%.

Gross Yield = Gross Annual Rent ÷ Current Market Value. Learn more about gross rental yield. 

Gross Yield - Real Estate Glossary - OfferMarket

What is Gross Yield in real estate?

## What does DSCR mean?

 

**DSCR** means *Debt Service Coverage Ratio*. DSCR is a ratio calculated by taking a rental property's operating income and dividing it by the cost of a loan. DSCR is a metric private lenders and commercial lenders use to determine the amount of a loan they are willing to provide for a single family or multi-family rental property.

 

## How do you calculate debt service coverage ratio?

 

Use our handy [DSCR Calculator](https://www.offermarket.us/tools/dscr-calculator) to quickly and accurately determine DSCR and maximum loan amount!

 

## Method 1: Net Operating Income ÷ Debt Service

 

### Key:

 

**Net Operating Income ("NOI")** = Rent Revenue - Taxes - Insurance - HOA Dues - Maintenance - Property Management

 

Debt Service = Mortgage Principal + Mortgage Interest

 

A DSCR of 1.0 means the property generates exactly net operating income to cover the cost of mortgage payments. 

 

## Method 2: Adjusted NOI ÷ PITIA

 

**Adjusted NOI**: Rent - Maintenance - Utilities - Property Management 

 

**PITIA**: Mortgage Principal + Mortgage Interest + Taxes + Insurance + HOA Dues

 

This second method tends to result in slightly lower DSCR, so it's important to understand how your private lender calculates DSCR.

 

## DSCR Example

 

Let's say you own a rental property that generates $30,000 in NOI and the monthly mortgage payments (principal and interest) are $2,000 or $24,000 annually. That means the property has a DSCR of 1.25.

 

## What debt service coverage ratio do private lenders require?

 

Private lenders typically require a DSCR of 1.2 or higher to make sure the income generated by the property can conservatively repay the loan. 

 

## How does DSCR relate to LTV?

 

DSCR varies based on the target [LTV (loan-to-value)](https://www.offermarket.us/real-estate-glossary/ltv) because the amount of the loan impacts the debt service component of the ratio.

 

## Learn about Private Lenders

 

Read [The Ultimate Guide To Real Estate Private Lenders](https://www.offermarket.us/blog/real-estate-private-lenders) to learn everything there is to know about working with private lenders to grow your real estate investing business.

 

## Looking for a Private Lender for Bridge Loans and DSCR Rental Loans?

 

 Get approved by [OfferMarket Capital](https://www.offermarket.us/capital), our private lending division.

Debt Service Coverage Ratio ("DSCR") = NOI ÷ (Mortgage + Taxes + Insurance). Learn how to calculate  DSCR.

large_DSCR - Glossary - MetaImage.jpg

medium_DSCR - Glossary - MetaImage.jpg

small_DSCR - Glossary - MetaImage.jpg

thumbnail_DSCR - Glossary - MetaImage.jpg

DSCR - Glossary - MetaImage.jpg

Debt Service Coverage Ratio (DSCR) - OfferMarket

What is Debt Service Coverage Ratio ("DSCR") in real estate?

Revenue - Operating Expenses

 

Net Operating Income is used to calculate capitalization rate ("cap rate"), a fundamental quantitative valuation metric for real estate investing.

 

Depending on the type of real estate, revenue can include: 

 

- Rental revenue
- Service fees
- Parking revenue
- Vending machine revenue

 

Operating expenses include:

 

- property management
- vacancy
- uncollectible rent revenue
- insurance
- property taxes
- maintenance

Net Operating Income ("NOI") = Revenue - Operating Expenses. Learn how to calculate NOI.

NOI - Net Operating Income - Real Estate Glossary - OfferMarket

What is Net Operating Income ("NOI") in real estate?

## What is USPAP?

 

USPAP stands for the **Uniform Standards of Professional Appraisal Practice**. USPAP is the ethics and performance standards for the entire appraisal profession (not just real property) in the United States.

 

## When was USPAP created?

 

USPAP was established by the United States Congress in 1989 through the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).

 

The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) is established in Title XI of FIRREA to serve as a government watchdog for appraisal standards vis-a-vis the Appraisal Foundation (TAF).

 

## What is the Appraisal Foundation?

 

The Appraisal Foundation (TAF) contains two divisions:

 

1. Appraisal Standards Board (ASB)
2. Appraisal Qualifications Board (AQB)

 

## What is the Appraisal Standards Board?

 

According to the Appraisal Foundation, the Appraisal Standards Board (ASB) is responsible for writing, amending, and interpreting the Uniform Standards of Professional Appraisal Practice (USPAP).

 

## What is the Appraiser Qualifications Board?

 

According to the Appraisal Foundation, the Appraiser Qualifications Board establishes the Real Property Appraiser Qualification Criteria (Criteria), or the minimum education, experience and examination requirements for real property appraisers to obtain a state certification.

 

## 15-Hour National USPAP Course

 

The **15-Hour National USPAP Course** is required in order to become a real property appraiser in the United States. 

 

## 7-Hour National USPAP Update Course

 

Real property appraisers must complete the **7-Hour National USPAP Update Course** on a bi-annual basis (every 2 years). 

 

## Who makes USPAP changes?

 

The Appraisal Standards Board (ASB) is responsible for amending USPAP.

 

## Who regulates the appraisal industry?

 

Each US state or territory has a State Appraiser Regulatory Agency that is responsible for certifying and licensing and supervising real estate appraisers according to federal mandates.

 

While the appraisal industry is enforced at the state level, there is oversight from the federal government through the Congressionally appointed Appraisal Foundation which sits under the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC).

 

## Who must follow USPAP?

 

All appraisers of real property must follow USPAP.

 

## Who writes USPAP?

 

The Appraisal Standards Board (ASB) is responsible for writing USPAP.

 

## USPAP resources

 

- [The Appraisal Foundation](https://www.appraisalfoundation.org/)
- [Appraiser Qualifications Board](https://www.appraisalfoundation.org/imis/TAF/About_Us/TAF_Boards_and_Panels/Appraiser_Qualifications_Board/TAF/Appraisal_Qualifications_Board.aspx?hkey=e82a999c-c8bb-4118-af4d-3d15fd7f799c)
- [Appraisal Standards Board](https://www.appraisalfoundation.org/imis/TAF/About_Us/TAF_Boards_and_Panels/Appraisal_Standards_Board/TAF/Appraisal_Standards_Board.aspx?hkey=68746225-2dda-4982-9dc5-c5cb6d235e66)

 

## Related real estate terms

 

- [Collateral Desktop Analysis](https://www.offermarket.us/real-estate-glossary/collateral-desktop-analysis)
- [ISAOA/ATIMA](https://www.offermarket.us/real-estate-glossary/isaoa-atima)

USPAP stands for Uniform Standards of Professional Appraisal Practice. USPAP is the ethics and performance standards for the entire appraisal profession in the United States.

USPAP means Uniform Standards of Professional Appraisal Practice

large_USPAP - Real Estate Glossary - MetaImage.jpg

medium_USPAP - Real Estate Glossary - MetaImage.jpg

small_USPAP - Real Estate Glossary - MetaImage.jpg

thumbnail_USPAP - Real Estate Glossary - MetaImage.jpg

USPAP - Uniform Standards of Professional Appraisal Practice - Real Estate Glossary.jpg

Uniform Standards of Professional Appraisal Practice (USPAP) | OfferMarket Glossary

USPAP

## What is a ALTA Settlement Statement?

 

ALTA is the American Land Title Association and the ALTA Settlement Statement is a standardized form that itemizes the debits and credits for the buyer and seller in a real estate transaction.

 

### There are four versions of the ALTA Settlement Statement:

1. ALTA Settlement Statement Combined
2. ALTA Settlement Statement Seller
3. ALTA Settlement Statement Borrower/Buyer
4. ALTA Settlement Statement Cash

 

#### See: [all ALTA and HUD-1 settlement statements](https://drive.google.com/drive/folders/1Q1I-B7FVaTGQJO7XFQxw5fs7r9Ai5pAh)

 

The title attorney or real estate attorney conducting the real estate settlement will provide a ALTA to the seller and the buyer. It's important to carefully review the ALTA to make sure there are no errors. This document is then signed by the seller and the buyer at closing.

 

### Related terms:

 

- [HUD-1](https://www.offermarket.us/real-estate-glossary/hud-1)
- [ISAOA/ATIMA](https://www.offermarket.us/real-estate-glossary/isaoa-atima)
- [Mortgagee Clause](https://www.offermarket.us/real-estate-glossary/mortgagee-clause)
- [CC](https://www.offermarket.us/real-estate-glossary/cc)

ALTA stands for the American Land Title Association. In real estate closings, the ALTA is a settlement statement which is used instead of the HUD-1 in certain cases.