Note: This is an illustrative deal profile representing a composite of transactions of this type. Figures are modeled, not drawn from a single closed file.
An operator with four Memphis properties — three single-family homes and one duplex, five doors total — had bought them with cash over eighteen months and wanted the capital back to keep buying.
Four separate DSCR loans would have meant four appraisals, four title orders, four sets of closing costs, and four underwrites. Instead: one blanket loan across all four.
The portfolio
| Property | Type | Value | Monthly rent |
|---|---|---|---|
| A | SFR | $285,000 | $1,850 |
| B | SFR | $262,000 | $1,725 |
| C | SFR | $248,000 | $1,690 |
| D | Duplex (2 doors) | $325,000 | $2,400 |
| Total | 5 doors | $1,120,000 | $7,665 |
The loan
- Loan amount: $840,000
- Blended LTV: 75%
- Structure: 30-year fixed, first five years interest-only
- Blended DSCR: 1.31x
- Cash to borrower at close: ~$280,000 after costs
- Prepay: 5-year step-down
- Time from application to funding: 16 days
How the blended DSCR works
A blanket loan doesn't test each property individually. It aggregates.
| Line | Amount |
|---|---|
| Gross monthly rent, all five doors | $7,665 |
| Interest-only payment on $840,000 @ ~8.1% | $5,670 |
| Taxes (blended, all four) | $0 (escrowed separately in this structure) |
| Insurance (blanket policy) | $0 (escrowed separately) |
| Effective monthly debt service incl. escrows | $5,850 |
| Blended DSCR | 1.31x |
The structural advantage: Property C, standing alone, was a 1.09x deal. Its taxes were high relative to its rent, and on its own it would have priced with a coverage add-on. Inside the blanket, the duplex's 1.44x coverage carried it, and the whole package priced off 1.31x.
That's the core case for a blanket. Your strongest asset subsidizes your weakest, and you pay the blended price rather than the worst-case price.
Why interest-only
Amortizing at $840,000 would have run roughly $6,230/month, putting blended DSCR near 1.20x — still qualifying, but with a pricing step and less cushion.
Interest-only dropped the payment by about $560/month, lifted coverage to 1.31x, improved the rate, and left an extra $6,700 a year of free cash flow to deploy into the next acquisition. Given the operator's stated plan — recycle this capital into two more properties within twelve months — amortizing on this loan would have been paying down debt on the old portfolio instead of buying the new one.
Why 16 days was possible
Four things, all of them boring:
- All four appraisals ordered on day one, in parallel, from a single AMC with Memphis coverage. Sequential ordering would have added two weeks by itself.
- The LLC was already in good standing with the certificate in hand. This is the number one killer of fast DSCR closings.
- All four properties were tenanted with executed leases, so market rent schedules weren't the critical path.
- One title order, one closing. Four separate loans would have meant four title commitments and four closing dates.
The trade-offs — read this part
Blanket loans are not free wins.
Cross-collateralization. All four properties secure one loan. A default on the loan puts every property in the package at risk, not just the underperforming one.
Release provisions matter enormously. If you sell Property B, can you release it from the blanket and keep the loan? At what paydown? Most blanket loans require a release payment above the property's pro-rata share — often 110–120% of its allocated loan amount. Negotiate release terms before closing. Nobody negotiates them after, and that's when they hurt.
One prepay clock for the whole package. Five-year step-down applies to the entire $840,000. You cannot exit one property early without triggering it.
Fewer lenders, less competition. The blanket DSCR market is smaller than the single-asset market. Fewer bidders generally means slightly worse pricing than the best single-asset execution on your strongest property.
When a blanket beats individual loans
- You have three or more properties and want one closing.
- Your portfolio has a weak link that would price badly alone.
- You want interest-only across the whole package.
- Speed matters and you can't manage four parallel processes.
When it doesn't
- You plan to sell one or more properties within the prepay window.
- Your properties are in multiple states with materially different title and recording timelines.
- Every property already clears 1.25x on its own — you're not gaining from blending, and you're taking on cross-collateralization for nothing.
No W2