Updated over 3 years ago on . Most recent reply
DSCR to buy and renovate
Hello group,
I am really green to Real estate and mostly interested in single family section 8 rentals. My question is the following. Can I obtain a DSCR loan to cover the purchase and renovation of a property? The property in question is just under $30k and will require about another $30k (guestimate) so total for DSCR around $60k. Is it better to secure the property first then obtain a separate loan for the remodel? Right now I am in the educational phase so this is just a hypothetical scenario.
Thank you for your input.
Jose in Orlando FL
Most Popular Reply
If you need your rehab costs financed, you would need to get a bridge loan which is a temporary loan where you'd pay interest only while you hold the note. Since you're fresh, 70-80% of the purchase price would be funded and 100% of the rehab would be funded. Once you complete the renovations and occupy the residence with a tenant, you then refinance out of your temporary loan and into long term financing which can be a DSCR loan if you want.