Real Estate Broker · San Diego, CA · Member since 2013 · 27 posts · 0 votes
Need help with the DSCR is not high enough. I want to put 20% down but he DSCR is only allowing for 40% LTV max. Any other ways to get up to 80% ltv besides hard money pricing?
Lender · New York, NY · Member since 2017 · 4 posts · 1 vote
8y
Hello Clint,
There are some commercial lenders out there that will allow you to combine your personal income with the Operating income of the building to get one combined ratio. They are few and far between, but they do exist. If you can find one, it would be much cheaper than hard money.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
8y
@Clint Worland You've talked to one lender? 10 lenders? Local banks? Credit unions? What's the sample size? Side note, I don't know how far you'll get looking for 20% down. At least start with 25% in mind when you're talking to a lender.
If you are not prepared to raise rents immediately, a measly $100, due to a lack of reserves you are probably making a mistake and are not ready to expand your investments.
It's not that great of a deal to warrant rushing in.
There are some commercial lenders out there that will allow you to combine your personal income with the Operating income of the building to get one combined ratio. They are few and far between, but they do exist. If you can find one, it would be much cheaper than hard money.
@Clint Worland You've talked to one lender? 10 lenders? Local banks? Credit unions? What's the sample size? Side note, I don't know how far you'll get looking for 20% down. At least start with 25% in mind when you're talking to a lender.
I have spoke to two separate credit Unions and 3 commercial brokers. Looking for my unicorn.
Lender · New Smyrna Beach, FL · Member since 2017 · 122 posts · 54 votes
8y
I think the time might be better suited closing the deal with a reputable bridge lender on an Interest-Only loan, which itself will ease the DSCR and allow you to get higher leverage now, and then refinancing once you (presumably) get the income up. Even if you get a bank lender that commits to a bit higher leverage today than the 40% you're being quoted, it won't be 70%, and you might still be wasting your time. Leave unicorn hunting to venture capitalists.