Financing options & DSCR Underwriting

[Brian Ellis]

Do they allow market/future rents to calculate? Or do they use current rents?

What ive been able to gather is that they will allow future rents if the place is vacant, and current rents if they are occupied.

Finally found an off-market deal and running into financing issues. I either need to bring the loan down by a bigger down payment which I dont have, or ask for seller financing. But I believe the bank may have an issue with seller carrying a second note in the form of a down payment?

Any help or suggestions would be appreciated.

[Robin Simon]

Quote from @Brian Ellis:

Do they allow market/future rents to calculate? Or do they use current rents?

What ive been able to gather is that they will allow future rents if the place is vacant, and current rents if they are occupied.

Finally found an off-market deal and running into financing issues. I either need to bring the loan down by a bigger down payment which I dont have, or ask for seller financing. But I believe the bank may have an issue with seller carrying a second note in the form of a down payment?

Any help or suggestions would be appreciated.

If its an acquisition loan (which this sounds like) - then most DSCR lenders will underwrite the market rent as determined by the appraisal (1007 form). Some DSCR lenders that are particularly specialized in Short Term Rentals can use projections from places such as AirDNA as @Scott E. mentioned, but property will have to be fully indicated as use for STR. DSCR lenders will also pretty much universally not allow a second note