Every input in that fraction is negotiable except the taxes, and even those are worth a phone call.
Smaller loan is the most direct fix. At 1.20 required, your maximum payment on 2,050 of rent is 1,708. Back out 455 of taxes and insurance and you have 1,253 for principal and interest, which at your quoted rate is roughly a 184k loan instead of 210k. That's 26k less recovered capital. That's the answer to "can I just take less" and it's why people end up leaving money in deals in this rate environment.
Interest-only genuinely does move DSCR, and it isn't only arithmetic. The lender is measuring whether the property's rent covers the required payment, so if the required payment is interest only, coverage is real for as long as that period lasts. What you're giving up is amortization, so equity build stops and you face the recast later. Some operators take it deliberately to get the capital out. Know the term and the prepayment structure before you sign.
Two inputs you're treating as fixed and shouldn't. Insurance at 145 a month on a freshly renovated house is worth reshopping hard, and a 30 dollar monthly difference moves your ratio by about two points. And ask which rent figure the lender uses. Many DSCR programs take the lower of your signed lease and the appraiser's market rent from the rent schedule addendum, which means a below-market lease caps you, while some programs use market rent outright.
The number nobody warned you about is taxes. In many states the assessment resets after a sale, and 310 a month may be the seller's old basis. If it reprices upward after closing your real coverage drops below what you underwrote. Check how your county handles reassessment before you set the loan amount.
