Industrial real estate—especially warehouses and distribution centers—is one of the fastest-growing sectors in the investment landscape. With rising demand for logistics, e-commerce fulfillment, and last-mile delivery hubs, industrial properties offer strong long-term leases, stable tenants, and reliable cash flow.
But traditional financing for industrial assets can be complex, requiring full tax returns, business documentation, and rigid underwriting criteria.
DSCR loans for industrial properties provide a powerful alternative, allowing investors to qualify based on property income alone, not their personal financials. If you’re ready to scale your portfolio into the industrial space, DSCR loans can help you get there—faster and with more flexibility.
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A DSCR (Debt Service Coverage Ratio) loan is a type of mortgage that qualifies borrowers based on the property’s net operating income (NOI) rather than personal income, W2s, or tax returns.
It’s ideal for:
✅ Most DSCR lenders want a DSCR of 1.20–1.30+, with strong tenant history or lease projections.
DSCR = Net Operating Income (NOI) ÷ Annual Debt Service
This means the property generates 25% more income than is required to service the debt—a solid sign of financial health for lenders.
No W2s, no tax returns, no DTI ratios. Approval is based on the income of the asset, not the borrower.
DSCR loans allow you to close in an LLC or corporate entity, helping investors scale and protect assets.
These loans typically close in 3–5 weeks, without the red tape of traditional banks or SBA loans.
Industrial properties often have multi-year NNN leases, making them ideal for DSCR underwriting based on consistent income.
💡 Properties must be income-producing or under contract with long-term tenants.
| Feature | Typical Range |
| Credit Score | 680+ |
| DSCR Requirement | 1.20–1.30 (may allow 1.0 with offsets) |
| Down Payment (LTV) | 25–30% for purchase |
| Loan Amounts | $500K – $15M+ |
| Ownership Type | LLC, Corp, or Trust |
| Appraisal Requirements | Income-based valuation |
| Loan Use | Purchase, refinance, or cash-out |
| Lease Requirements | Existing leases or signed LOIs |
| Reserves Required | 6–12 months of debt service |
Investor: Andre, mid-sized industrial investor in the Midwest
Property: 52,000 sq ft fulfillment center in Columbus, OH
Tenant: E-commerce third-party logistics (3PL) company
Annual Lease Income: $210,000
Operating Expenses: $30,000 → NOI = $180,000
Annual Debt Service: $150,000
DSCR = 1.20
Result:
Industrial DSCR loans work best in metro areas with:
Top U.S. markets include:
Not all DSCR lenders work with industrial assets. Look for:
🔍 Tip: Ask if the lender accepts NNN leases, vacancy projections, or signed LOIs in underwriting.
| Feature | DSCR Loan | SBA / Bank Loan |
| Income Verification | ❌ Not required | ✅ Required (business & personal) |
| Ownership Type | ✅ LLC or Corp allowed | 🚫 Must be owner-occupied |
| Timeline | ✅ 3–5 weeks | ❌ 8–12+ weeks |
| Best Use Case | Investment / rental property | Owner-occupied or business expansion |
| Documentation | Minimal | Extensive |
✅ Choose DSCR if the property is for investment and income-producing.
🚫 Choose SBA if you plan to operate a business from the property.
Warehouses and logistics hubs aren’t just for institutional players anymore. With DSCR loans, small to mid-sized investors can now finance industrial assets without submitting a single tax return.
Whether you’re acquiring a stabilized distribution center or refinancing an existing industrial property, DSCR financing offers speed, simplicity, and scalability—with income-driven approval and LLC-friendly terms.
Invest in the backbone of the economy with a lending solution built for investors, not employees.
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Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
