Is there such a thing as DSCR loans for Commercial/Mixed Use

Baltimore, Maryland
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Is there such a thing as DSCR loans for Commercial/Mixed Use

Danielle DeCormis
Investor · MD · Member since 2024 · 25 posts · 7 votes

Hello, All!

I am looking at a property zoned commercial where there is retail space on the bottom floor and an apartment above. The apartment requires substantial work to be completed prior to renting. The retail space needs minor work. I'm used to BRRR'ing residential homes and would like to do something similar with this property. Is that a thing? What are my options?

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Noah WrightBusiness Member
USA, Nationwide · Member since 2024 · 218 posts · 96 votes
1y
Quote from @Danielle DeCormis:

Hello, All!

I am looking at a property zoned commercial where there is retail space on the bottom floor and an apartment above. The apartment requires substantial work to be completed prior to renting. The retail space needs minor work. I'm used to BRRR'ing residential homes and would like to do something similar with this property. Is that a thing? What are my options?


 Absolutely! Happy to help--

[email protected]737-773-3717
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  • Noah WrightBusiness Member
    USA, Nationwide · Member since 2024 · 218 posts · 96 votes
    1y
    Quote from @Danielle DeCormis:

    Hello, All!

    I am looking at a property zoned commercial where there is retail space on the bottom floor and an apartment above. The apartment requires substantial work to be completed prior to renting. The retail space needs minor work. I'm used to BRRR'ing residential homes and would like to do something similar with this property. Is that a thing? What are my options?


     Absolutely! Happy to help--

    [email protected]737-773-3717
    1Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y
    Quote from @Danielle DeCormis:

    Hello, All!

    I am looking at a property zoned commercial where there is retail space on the bottom floor and an apartment above. The apartment requires substantial work to be completed prior to renting. The retail space needs minor work. I'm used to BRRR'ing residential homes and would like to do something similar with this property. Is that a thing? What are my options?


     Hi Danielle, 

    Yes this loan does exist. If the Retail side has a higher sqft than the residential unit, you will have more of a challenge to find a lender that can do it. They exist, but you will need to go local for best terms, or do a DSCR based commercial loan. The rate will be high though.

    If the apartment needs rehab, it will not work on a long term loan. I would suggest looking for a bridge loan instead. 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
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  • Simmy AhluwaliaPro Member
    Lender · Atlanta, GA · Member since 2015 · 1k+ posts · 200 votes
    1y

    @Danielle DeCormis - yep, it definitely exists. Double check the zoning for MU. Not sure how long it's been vacant, but definitely have an Inspection done for any foundation issues, walk the property with a licensed GC to determine the exact SOW. You'll have to research market rent comps to UW the DSCR.

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