The Business

A full-time real estate investor in Phoenix operates a portfolio of nine rental properties that generate steady monthly cash flow. The investor has been self-employed for six years with no W-2 income, focusing entirely on rental property acquisition and management. The portfolio is well-maintained and produces consistent cash flow, with occupancy rates above market averages.

An opportunity emerged: a six-unit multifamily property in Phoenix was available for acquisition at a reasonable price. The investor had the experience and capital to manage this property successfully, but needed traditional financing to close the deal. The problem was straightforward: how to qualify without W-2 income or acceptable tax returns.

The Challenge

When the investor approached conventional lenders, they all requested the same documentation: two years of personal tax returns showing qualifying income. However, the investor's accountant had done excellent work managing the portfolio, which meant significant write-offs and depreciation on the tax returns. As a result, the tax returns showed minimal "qualifying income" despite the strong rental cash flow that actually existed in the bank account each month.

Pain Points

  • No W-2 employment income, entirely self-employed investor
  • Tax returns showed minimal income due to legitimate deductions and depreciation
  • Strong actual rental cash flow didn't match tax return numbers
  • Credit score of 680—at or near minimum for conventional financing
  • Conventional lenders universally required tax return documentation

The Mondra Capital Approach

We identified a DSCR (Debt Service Coverage Ratio) loan program—a financing product specifically designed for real estate investors who don't have traditional income documentation. Rather than underwriting based on the borrower's personal income, DSCR loans underwrite based solely on the property's income. No W-2s, no personal tax returns required.

The six-unit property was projected to generate $8,400 per month in gross rent. The proposed loan payment (PITIA—principal, interest, taxes, insurance, HOA) would be approximately $7,100 per month. This creates a DSCR of 1.18 ($8,400 / $7,100), which exceeds the lender's minimum of 1.0. The lender approved the loan based entirely on the property's income potential, with no requests for personal documentation.

"Every bank wanted my tax returns. My accountant does a great job — which means on paper I look broke. DSCR was the answer and Mondra made it happen fast." Real Estate Investor, Phoenix AZ

The Outcome

Results Achieved

  • $875K DSCR loan funded in 18 business days
  • 30-year fixed rate at 75% LTV cash-out refi structure
  • Acquired 6-unit multifamily property in Phoenix market
  • Stabilized units at market rent within 60 days of acquisition
  • Added $2,800/month net cash flow to existing portfolio

With DSCR financing, the investor was able to close on the multifamily property without any personal income verification. The underwriting focused entirely on the property's rental potential. After acquisition, the investor moved quickly to stabilize rents, bringing all units to market rates within two months. The property now generates approximately $2,800 per month in net cash flow after debt service. The DSCR loan model proved ideal for experienced real estate investors whose tax returns don't reflect their actual economic reality.

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