DSCR loans - 15% down on turnkey properties

Mortgage Brokers & Lenders
1yFollow

DSCR loans - 15% down on turnkey properties

Mark Delosreyes
Accountant · Elizabeth City, NC · Member since 2017 · 41 posts · 21 votes

Any lenders do 15% down (or less) DSCR loans, 30 year am, on turnkey investment properties, mainly for small multifamily 1-4 units? There's not really a lot of value add opportunity or sales comps in this space for our area.

I typically (BRRRR) purchase fixer uppers with cash, fix up, rent, then refinance on a DSCR and get all of my money back. I also use hard money loans for the houses we fix and flip. I have 100+ deals under my belt, so not really a beginner.

Thanks!

3Reply
665 views

Most Popular Reply

Derek BrickleyBusiness Member
Lender · Ann Arbor, MI · Member since 2021 · 692 posts · 237 votes
1y

Hey Mark!  

Yes we definitely do and you'll probably find a number of us here who could help with that.  Note that the 15% down options of course have higher rates.  As long as credit is good/fair and the debt-service ratio is above 1.0 you shouldn't have any issues with that.  Feel free to reach out if you have any other questions though!

[email protected]734-645-7722
Gold Star Mortgage Financial Group547 Reviews
WebsiteView Page
1Reply
See this reply in the discussion

11 Replies

Jump to latestLatest
  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    1y

    @Mark Delosreyes we have them available for purchases, but not cash out Refi's. Max on purchase is 85% LTV. Max on cash out is 80% LTV.

    [email protected]619-456-8311
    Helm Mortgage Corp.5119 Reviews
    WebsiteView Page
    0Reply
  • Derek BrickleyBusiness Member
    Lender · Ann Arbor, MI · Member since 2021 · 692 posts · 237 votes
    1y

    Hey Mark!  

    Yes we definitely do and you'll probably find a number of us here who could help with that.  Note that the 15% down options of course have higher rates.  As long as credit is good/fair and the debt-service ratio is above 1.0 you shouldn't have any issues with that.  Feel free to reach out if you have any other questions though!

    [email protected]734-645-7722
    Gold Star Mortgage Financial Group547 Reviews
    WebsiteView Page
    1Reply
  • Mark Delosreyes
    OP
    Accountant · Elizabeth City, NC · Member since 2017 · 41 posts · 21 votes
    1y

    @Raymond J. Rodrigues, thanks for getting back to me so quickly. Please message me, and let me know what information you need to get a term sheet. Thanks, and I look forward to hearing from you.

    0Reply
  • Doug SmithPro Member
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    1y

    I think most of us do, but the problem that I've discovered with 15% down programs over the past couple of years is the balance between the cost of the home and the rent it can garner. With the DSCR formula being Rent/(PITI+HOA), we're seeing that most savvy investors are putting own much more...in many cases 30% to 35%...to get the DSCR above 1.0%. Your question of "does the product exist" is a yes, but the better question might be "will the property cash flow at a 1.0X or better at 15% might be the more appropriate question.

    0Reply
  • Mark Delosreyes
    OP
    Accountant · Elizabeth City, NC · Member since 2017 · 41 posts · 21 votes
    1y

    @Doug Smith, thanks for reaching out. Yes, my DSCR calculation is 1.5 on the conservative side. It would definitely work, but would depend on the rest of the terms of that loan product - interest rate, origination fee, etc.

    0Reply
  • Simmy AhluwaliaPro Member
    Lender · Atlanta, GA · Member since 2015 · 1k+ posts · 200 votes
    1y

    Ditto to all of the above.  85% is very doable with a strong credit score, strong dscr, but yes, the rate is going to be higher because of the higher leverage.

    0Reply
  • Noah WrightBusiness Member
    USA, Nationwide · Member since 2024 · 343 posts · 123 votes
    1y
    Quote from @Mark Delosreyes:

    Any lenders do 15% down (or less) DSCR loans, 30 year am, on turnkey investment properties, mainly for small multifamily 1-4 units? There's not really a lot of value add opportunity or sales comps in this space for our area.

    I typically (BRRRR) purchase fixer uppers with cash, fix up, rent, then refinance on a DSCR and get all of my money back. I also use hard money loans for the houses we fix and flip. I have 100+ deals under my belt, so not really a beginner.

    Thanks!


     Absolutely! Happy to help --

    [email protected]737-773-3717
    0Reply
  • Jay S.Pro Member
    Lender · San Francisco Bay Area · Member since 2019 · 54 posts · 47 votes
    1y

    Hi Mark; multiple options out there. On our end, as long as you have 720+ credit score and DSCR Ratio 1.0; you are good to go for 15% down payment on a DSCR anywhere in USA for Single Family Homes & 2-4 Units. Feel free to reach out if you want to price out anything.

    [email protected]408-832-8200
    0Reply
  • Austin ClarenceBusiness Member
    Lender · Phoenix, AZ · Member since 2023 · 136 posts · 32 votes
    1y

    I just helped an investor close on a DSCR with 15% down, 4 unit in Houston. Its very possible and honestly a great option if you have strong credit and strong rents.

    [email protected]650-906-2376
    Austin Clarence with NEXA Mortgage553 Reviews
    View Page
    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3w

    Hey Mark,

    There are DSCR options with 15% down minimum on both STR and LTR properties. They are limited to 1-4 unit residential and also have certain, DSCR requirements to hit depending on the property type.

    Happy to chat!

    [email protected]818-269-7983
    LuxePrivate Investments LLC 570 Reviews
    WebsiteView Page
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free