Deal snapshot
| Location | Bethesda, Maryland (East Bethesda / 20814) |
| Property type | East Bethesda SFR (4BR/3BA after rehab) |
| Loan type | Hard money bridge → Maryland DSCR hold |
| Loan amount | $734,400 bridge (90% LTC) |
| Close time | 9 business days |
Investor challenge
A DMV portfolio sponsor compared DC rowhouse BRRRR against Montgomery County SFR holds on the same capital. An East Bethesda four-bedroom needed $98,000 in kitchen, bath, and HVAC updates before leasing to NIH-adjacent professionals. Modeled Petworth two-unit rent at $3,850/mo cleared ~1.06 DSCR in DC; this SFR at $3,650/mo cleared 1.16 at 68% LTV with Maryland opex — distinct from the Woodmont townhome example on DSCR loans Bethesda.
Jaken’s solution
90% LTC at 10.50% IO with 12-month term and draws tied to Montgomery County DPS milestones. Exit pre-underwritten to DSCR refi at 68% LTV — conservative leverage on tight-ratio SFR vs townhome.
Outcome
Market rent at stabilization: $3,650/mo (24-month federal employee lease)
Appraised value at refi: $915,000
DSCR refi: 68% LTV → $622,200 @ 8.25% — DSCR ~1.16; cash extracted ~$42,000 after bridge payoff
DMV hub: DSCR loans Bethesda MD · investment property financing Washington DC
Acquisition
Purchase: $720,000 · Day 9 close
Hard money: 90% LTC · 10.50% IO · 12-month term
Rehab scope
| Item | Cost |
|---|---|
| Kitchen + primary bath remodel | $44,000 |
| Hall bath + main-level LVP | $18,500 |
| HVAC replacement | $22,500 |
| Exterior paint + landscaping | $13,000 |
Total rehab: $98,000 · All-in: $818,000
Hold exit (executed)
- Gross rent: $3,650/mo
- Appraisal: $915,000
- DSCR refi: 68% LTV → $622,200 @ 8.25%
- DSCR ratio: ~1.16 at Maryland opex (24%–28% load)
Why cross-border hold beat DC on this file
Identical $3,650/mo on a DC row modeled ~1.04 at 68% LTV after RLTO and recordation friction. East Bethesda SFR cleared 1.16 without TOPA timeline — enough to recycle capital without selling.
Takeaway: when permanent debt is the exit, model jurisdiction at LOI — Maryland SFR and townhome corridors often beat DC on ratio even when headline rent is similar.
DC vs Maryland pro forma (same $3,650/mo rent)
| Line | Modeled DC row | East Bethesda SFR (executed) |
|---|---|---|
| Gross rent | $3,650/mo | $3,650/mo |
| Opex load | 33% (RLTO + recordation reserve) | 26% (Maryland landlord) |
| Appraisal | $880,000 | $915,000 |
| LTV | 68% | 68% |
| DSCR | ~1.04 | ~1.16 |
| TOPA timeline | 30–90 days if occupied | N/A (vacant at close) |
Sponsor passed on Petworth upper/main at LOI for ratio math, not rent ceiling.
Montgomery County draw path
| Draw | % | Milestone |
|---|---|---|
| 1 | 20% | Permits + demo |
| 2 | 35% | Rough HVAC + electrical |
| 3 | 30% | Kitchen + bath install |
| 4 | 15% | Final DPS + lease-ready |
Rehab completed in 5.5 months — NIH tenant signed 24-month lease at $3,650/mo before refi application.
Flip alternative rejected at LOI
Modeled $875K–$920K ARV flip on East Bethesda SFR after $98K scope — ~$52K net after Montgomery transfer and 6-month carry. DSCR hold extracted ~$42K cash while retaining cash-flowing asset — preferred for portfolio sponsor building Maryland hold lane parallel to DC rows.
Operator lessons
Tenant screening: NIH contractor lease required 720+ credit and 2 months deposit — standard Montgomery expectation on $3,650/mo SFR. Tax stress: Montgomery bill modeled +10% post-rehab — $680/mo vs $620/mo seller bill at refi. Insurance: SFR landlord policy $1,950/yr bound before DSCR application.
Cross-border stack: Sponsor held Petworth row (separate file) while extracting Maryland equity here — jurisdiction diversification without selling DC narrative assets. See DMV cross-border blog.
Woodmont alternative passed at LOI
Sponsor underwrote Woodmont townhome at $785K + $125K rehab — flip spread below 12% and DSCR ~1.02 at 70% LTV on modeled $980K ARV. East Bethesda SFR won on faster lease-up, lower HOA friction, and 1.16 ratio — see fix and flip Bethesda for Woodmont velocity vs margin tradeoff. Permanent debt was pre-approved before hard money close — refi terms locked at 68% LTV cap so stabilization target never drifted. Vacant at acquisition eliminated TOPA — lease signed 18 days after final DPS inspection; appraisal ordered same week as lease execution. Sponsor holds three Maryland SFRs and two DC rows under one Jaken relationship — cross-border refi playbook documented in DSCR Bethesda spoke. Montgomery County tax reassessment post-rehab added $60/mo vs pro forma — immaterial to 1.16 ratio at 68% LTV. HVAC line ($22,500) was largest single draw — ordered week 2 to avoid summer lead-time slip on NIH lease start target. Kitchen + primary bath ($44,000) drove appraisal support — hall bath refresh alone would not have justified $915K value on East Bethesda 4-bed product.
Related
Pre-Qualify for Maryland DSCR · (833) 264-7776