Tommy DobczykOpportunity Zone Advisor, OZ Wizard · Director of Development | Certified Opportunity Zone Advisor

Unlock Commercial Real Estate Deals: DSCR Loan Strategy Revealed! #shorts

26 Mar 2026 · 2 min

Watch on YouTube

1:34

In this short, Tommy Dobczyk walks through a hypothetical $18 million commercial property acquisition and explains how to engineer the financing to achieve a 1.6–1.8 Debt Service Coverage Ratio (DSCR). He proposes a 50 % loan‑to‑value (LTV) structure: $9 million first‑position bank financing at roughly 7.5 % interest, 25‑year amortization, and a 10‑year balloon; and $9 million second‑position private financing from “Mike” at about 5 % interest, 25‑year amortization, 10‑year balloon. Tommy calculates the combined monthly debt service at roughly $120,000 (≈$1.4 million annually). To meet the desired DSCR range, the property must generate $190,000–$215,000 of monthly net operating income (NOI). The video is a concise, instructional walkthrough of the numbers needed to reverse‑engineer a commercial loan structure.

Chapters

Are you in the deal room? The building, I want to see what we would need to do to reverse engineer the numbers so that we get about a 1.6 or 1.8 DSCR score for the amount of money into this. Probably end up paying about $18 million for it, the building it anyway. So tell me how much we need to make, be making a month if we get $9 million on a loan, 50% LTV, and the other is going to be my financing. So spill it out. I can't even read my own gibberish, but ChatGPT does. And it says right here, deal terms are going to be $18 million. I know Mike said $15 million, so I said I want $18 million. Why did I say that? I'll tell you in a minute. $9 million goes to the bank in first position. Mike is $9 million in second position. Mike paid $9 million for this. So what I want to do is I want to make him whole, right? And then I'm going to turn around and I'm going to get him to agree to do 5% interest, 25-year amortization, 10-year balloon. And then I'm going to get the bank to give me 7.5%, 25-year percent amortization, which is a typical commercial term. And how I'm going to do this is by getting what's called a DSCR commercial loan. DSCR means debt service coverage ratio. Let's go down and take a look at what that looks like. The debt service that I would end up having to pay on this building is somewhere around $120,000 a month, right? So if I paid $120,000 a month, that means I'm going to pay right about $1.4 million a year, right? What I need to do in order to meet the 1.6 or 1.8 debt service coverage is create $190,000 to $215,000 of income out of this building.