From Valuation Woes to Investment Wins in Massachusetts

A Massachusetts real estate investor needed to refinance a single-family rental property before the existing loan matured. However, an appraisal that underestimated the property's fair market rent negatively impacted the Debt Service Coverage Ratio (DSCR), putting the refinance at risk. Express Capital Financing developed a customized solution that improved the property's valuation metrics, strengthened the DSCR, and allowed the borrower to successfully complete the refinance while preserving the long-term investment strategy.

Property Type: Single-Family Rental
Location: Worcester, Massachusetts
Loan Program: DSCR
Loan Amount: $355,950
Loan-to-Value: 63%
Interest Rate: 7.00%
DSCR: 1.267
Closing Date: November 5, 2024

The investor needed to refinance an existing loan before its maturity date, but several obstacles threatened the transaction.

The property's appraisal came in with a lower-than-expected fair market rental value, reducing the projected rental income used to calculate the Debt Service Coverage Ratio (DSCR). As a result, the property initially failed to meet the lender's debt service requirements for refinancing.

With the current loan approaching maturity, the investor needed a financing partner capable of moving quickly while finding a creative solution to overcome both the valuation issue and the tight closing timeline.