$2.78M Portfolio Refinance Using Hybrid Structuring

Consolidating Private Debt While Unlocking Liquidity

The borrower, an active investor and entrepreneur, owned several Miami investment properties financed through a private lender. The existing financing had reached a maturity deadline, creating urgency to refinance the portfolio and retire the outstanding private debt.

Beyond the refinance itself, the borrower’s goal was to unlock additional capital from the portfolio to support business expansion. To accomplish both objectives, the transaction needed to:

By the time the deal closed, the borrower had achieved just under $1M in net cash-out proceeds while consolidating the portfolio into long-term financing.

When Traditional DSCR Models Break Down

On the surface, the deal appeared to fit within standard DSCR lending parameters. But once underwriting began, several structural complications emerged. The portfolio contained multiple property classifications, including a luxury non-warrantable condo, a single-family property with an additional dwelling unit (ADU), a property sitting on more than five acres, and assets with low appraised rental income relative to property value.

One property in particular highlighted the problem. Despite being valued at $1.7M, the appraisal supported only $3,700 per month in rental income. Under a traditional DSCR model, that level of rent could not support the debt service required for the desired loan amount. The issue wasn’t the borrower’s financial strength, it was the rigidity of traditional underwriting.

Additional complications included:

• Limited comparable properties within close proximity
• Rental valuation inconsistencies across luxury assets
• Portfolio debt coverage that didn’t align across every property

Rather than forcing the deal into a traditional DSCR framework, the team restructured the transaction mid-process. The solution was a hybrid DSCR + bank statement qualification approach. This allowed the underwriting model to evaluate two income sources simultaneously:

Using this hybrid approach accomplished two critical things. First, it supplemented debt coverage for the properties that underperformed strictly on rental income. Second, it allowed the borrower to qualify without submitting tax returns, maintaining the flexibility that investor borrowers often require.

At the same time, the team worked through appraisal concerns. Because one property had been classified as a unique asset with distant comparable sales, the valuation initially created eligibility issues. By facilitating an amended appraisal review, the property was reclassified and made eligible within the lending framework. Once these adjustments were made, the portfolio could move forward toward closing.

Portfolio Closed with Hybrid Qualification

With the revised structure in place, the portfolio was approved quickly after a full file submission. Within seven days of receiving the completed package, the loan received approval and moved toward closing.

The final structure allowed the borrower to:

• Consolidate private lender debt
• Close without tax returns
• Maintain leverage across four properties
• Unlock nearly $1M in cash-out proceeds

What began as a traditional DSCR refinance ultimately required a creative hybrid solution to align the borrower’s income profile with the realities of the assets.

Meet the Closer

“This deal came down to creativity and flexibility. When the properties couldn’t qualify under a standard DSCR approach, we pivoted and rebuilt the structure using hybrid income.”

Jack Bergen

Account Executive

Work with Jack

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