DSCR and debt yield are the two numbers a lender reads before anything else — both measure how comfortably the property's income supports the debt, from two different angles. Here's what each one means in Mogul Deal Evaluator's detailed model, and where they show up.
DSCR — income vs the payment
DSCR = net operating income ÷ annual debt service. A 1.25x means the property earns 25% more than the year's loan payments require. Things to know about how it's computed here:
- The numerator is the model's NOI — which, per Mogul Deal Evaluator's convention, is before the management fee and (by default) reserves. If your lender computes coverage after those items, their DSCR will read lower than this one on the same deal.
- The denominator is the year's scheduled debt service — so an interest-only period raises DSCR during IO (smaller payments) and it steps down when amortization begins. Check the projection years, not just Year 1.
- No debt, no DSCR: with no debt service to divide by, the ratio isn't meaningful and the gauge says so rather than inventing a number.
Debt yield — income vs the loan itself
Debt yield = NOI ÷ loan amount. Where DSCR depends on the loan's terms (rate, amortization, IO), debt yield ignores them entirely — it asks what return the lender would earn on their money if they owned the income stream. That's why lenders like it: you can't engineer it up with a longer amortization or an IO period the way you can DSCR.
It also differs from LTV: LTV compares the loan to the value (which moves with cap rates); debt yield compares the loan to the income. Note Mogul Deal Evaluator can show debt yield on more than one basis — the headline figure and a lender-basis figure — each labeled where it appears.
Where they live — and what targets them
- The Live Analysis rail shows a DSCR gauge read against your Buying Target, and debt yield among the supporting stats.
- DSCR is a Buying Target — and one of the criteria Maximum Purchase Price can solve against, so "the most I can pay while keeping coverage at my threshold" is a one-click question.
- Debt yield is not an MPP target — it appears as context, but the goal-seek doesn't solve against it.
On a mobile home park
Both ratios are computed exactly as above, from the park's modeled operating NOI. What differs is not the arithmetic — it is what a lender will accept as the income behind it.
- A park's NOI can blend lot rent from tenant-owned pads with home rent from park-owned homes. Some lenders discount or exclude the home-rent portion, or treat the homes as personal-property collateral rather than real estate. Mogul Deal Evaluator does not apply any such haircut on its own.
- Keeping the lot and home-only portions separate in Pad & Home Income is what makes that conversation possible: you can see immediately how much of your coverage rests on home income.
Treat the DSCR and debt yield shown here as your underwriting, then confirm eligibility, the income basis, and any exclusions with the lender. This model does not encode any lender's program rules.
What's a good number?
That's between you, your market, and your lender — Mogul Deal Evaluator deliberately doesn't prescribe thresholds. What it gives you is the honest calculation and the tools to test your own: set your DSCR target in Buying Targets, and stress the ratio in Sensitivity Analysis before a lender does it for you.
Common questions
- "My lender's DSCR is lower than Mogul Deal Evaluator's." — Almost always the NOI basis: this model holds the management fee (and by default reserves) below NOI. Compare like with like.
- "DSCR looks great in Year 1, then drops." — An interest-only period ending. That step-down is exactly what the projection view exists to show you.
- "DSCR and debt yield disagree about the deal." — They can: generous loan terms lift DSCR without touching debt yield. When they diverge, debt yield is telling you about leverage, DSCR about structure.
