Case Study: DSCR Loan in Brooklyn, NY

ABOUT THE BROOKLYN MULTIFAMILY DEAL

A four-unit in Brooklyn, purchased at $3,850,000 to hold as long-term rentals. The five-story building, constructed in 1930, contains 4,395 square feet of gross building area across four units: a three-bedroom duplex with a private backyard on the lower floors, and three two-bedroom floor-throughs above it. Three of the four units were vacant at closing. Ridge Street Capital funded the purchase as a DSCR loan at 55% LTV through its DSCR program in New York, underwritten on the appraiser's market rent schedule on a lease-up basis.

WHAT MADE THIS DSCR MULTIFAMILY PURCHASE SPECIAL

• Two-to-four unit properties qualify for residential mortgage underwriting and are valued on comparable sales. At five units or more, a building is underwritten as commercial: valued on net operating income and a cap rate, not comparable sales. That distinction changes both the appraised value and the available loan terms. For a lease-up property with three vacant units, commercial valuation on in-place income would have produced a lower appraised value, a lower loan amount, and shorter amortization. The four-unit count kept this deal in residential DSCR territory. Ridge Street Capital financed it on a 30-year fixed DSCR loan for multifamily.
• Purchased at  appraised value. The property first listed at $4,485,000 in September 2025, came off market, and relisted at $3,995,000 before the investor contracted at $3,850,000. The purchase price matched the appraiser's value conclusion exactly, supported by all three appraisal approaches: sales comparison at $3,850,000, income approach at $3,870,000, and cost approach at $3,859,858.
• Underwritten on $22,900 in monthly market rent, not in-place income. At closing, all four units were vacant. Ridge Street Capital underwrote the loan on the appraiser's confirmed market rent schedule across all four units: $8,500 for Unit 1 and $4,800 each for Units 2, 3, and 4, totaling $22,900 per month. Against $17,137.96 in monthly PITIA, that rent produces a 1.34x DSCR. The loan qualifies on the appraiser's market rent schedule. With all four units leased to market, the building projects to a cap rate of approximately 5.6% on the $3,850,000 purchase price.
• Closed four days before rate lock expiration in a New York attorney-reviewed transaction. New York requires independent legal representation for the buyer, seller, and lender, with three separate attorneys coordinating their own timelines across every step: contract review, title commitment, lien searches, and closing documents. Nothing advances without each party's counsel. Ridge Street Capital closed before expiration and protected the borrower's DSCR loan rate. A missed close would have required a re-lock at current market rates. The four days between closing and lock expiration represent the margin the team executed inside.

THE RESULT  

The completed DSCR purchase gave the investor a 4-unit brownstone in Clinton Hill, Brooklyn with a value-add potential and appreciation perspective.

• Loan Amount: $2,117,500 (30-Year Fixed DSCR Loan)
• Rate: 7.125%
• LTV: 55%
• DSCR: 1.34x
• Purchase Price: $3,850,000

MORE ABOUT RIDGE STREET CAPITAL

Ridge Street Capital provides Fix and Flip loans, DSCR rental loans, and ground-up construction financing to real estate investors across 36 states. Our focus is exclusively on investment properties loans, which means every deal we evaluate gets the attention of a team that has seen the full range of what makes an investment work or fail.

If you want a lender who will tell you clearly whether a deal makes sense and move fast when it does, contact us today.

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