DSCR = Debt Service Coverage Ratio
This determines whether a bank will approve you.
Formula:
DSCR = NOI ÷ Loan Payment
Example:
NOI = $150,000
Loan payment = $120,000
DSCR = 1.25 (this is the target for most lenders)
✔ Bank Requirements:
- 1.25 DSCR (minimum)
- Clean P&Ls
- Trailing 12 months + 3-year history
- 30% down payment (standard)
- Strong credit history
- Personal financial statement
- Some cash reserves
❗What buyers misunderstand:
A park can have a great NOI but still fail DSCR if the purchase price is too high.
Banks lend on CASH FLOW — not emotions.
