DSCR loan, Florida Property

Private Lending & Conventional Mortgage Advice
3yFollow

DSCR loan, Florida Property

Wendy S.
Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes

Hi BPers

So I'm looking to buy an off market property in Lakeland FL with a DSCR loan.

Can anyone shed some light on the area, this loan product and possible recommendations for closing attorneys in Lakeland FL, I'm in GA.

I'm seeing interest rates 7.5 to 8.5% with 25% down. Speaking with another Lender for 20% Dp as well.

PV should be around $200K with existing Tenant remaining in place.

Pp = $150/160K

Thanks

2Reply
89 views

Most Popular Reply

John O'LearyPro Member
Lender 路 Winter Park, FL 路 Member since 2021 路 737 posts 路 412 votes
3y

Hi Wendy,

I'd be happy to connect and see what options you have available to you. I'm in Orlando and can also give you investor friendly title companies and attorneys in the area. Lakeland is about 15-20 min away.

[email protected]800-663-4122
2Reply
See this reply in the discussion

34 Replies

Jump to latestLatest
  • John O'LearyPro Member
    Lender 路 Winter Park, FL 路 Member since 2021 路 737 posts 路 412 votes
    3y

    Hi Wendy,

    I'd be happy to connect and see what options you have available to you. I'm in Orlando and can also give you investor friendly title companies and attorneys in the area. Lakeland is about 15-20 min away.

    [email protected]800-663-4122
    2Reply
  • Jossalyn Wallace
    Real Estate Agent 路 Destin, FL 路 Member since 2019 路 116 posts 路 111 votes
    3y

    Some DSCR products allow you to do interest only payments for so many years. I would ask your lender about that option as well .

    Good luck with it! 

    1Reply
  • Caroline Gerardo
    Lender 路 Washington DC 路 Member since 2015 路 2k+ posts 路 2k+ votes
    3y

    For an accurate quote you need to list the market rents and if there is HOA or not. Also what you think your middle FICO is...

    Various programs available. You need 12 or 24 months reserves depending on where you go.

    John P Collins but do not open attorney until AFTER you have contract with seller. If not using an agent, yellow pad the details and everyone signs, then have him open it.

    Do you really want an existing tenant? (I would not)

    1Reply
  • John O'LearyPro Member
    Lender 路 Winter Park, FL 路 Member since 2021 路 737 posts 路 412 votes
    3y
    Quote from @Jossalyn Wallace:

    Some DSCR products allow you to do interest only payments for so many years. I would ask your lender about that option as well .

    Good luck with it! 

    This is Correct. There is a 40 year loan with the first 10 years IO. You can also look at 5/1, and 7/1 IO options.


    [email protected]800-663-4122
    2Reply
  • Brandon BeardtPro Member
    Lender 路 La Crescenta, CA 路 Member since 2021 路 261 posts 路 157 votes
    3y
    Quote from @Wendy S.:

    Hi BPers

    So I'm looking to buy an off market property in Lakeland FL with a DSCR loan.

    Can anyone shed some light on the area, this loan product and possible recommendations for closing attorneys in Lakeland FL, I'm in GA.

    I'm seeing interest rates 7.5 to 8.5% with 25% down. Speaking with another Lender for 20% Dp as well.

    PV should be around $200K with existing Tenant remaining in place.

    Pp = $150/160K

    Thanks


     Hi Wendy,

    I'm not familiar with the Lakeland area so won't be able to help you out regarding area insights or closing attorneys. Regarding the DSCR loan, I would imagine the lender/broker you're working with would be able to give you more information regarding what their specific program entails (qualification metrics, loan terms, etc). The general gist is that if you have good FICO and the property is projected to cashflow, you're good to go. It's obviously more intricate than that, but you get the idea. There are a ton of forum posts that explain DSCR as well. Rates for DSCR between 7.5%-8% at 75% LTV are good. I see around the same depending on the different loan level pricing adjustments per lender. I would imagine 80% LTV for DSCR is much more expensive. Best of luck to you!

    [email protected]818-726-2418
    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y
    Quote from @John O'Leary:

    Hi Wendy,

    I'd be happy to connect and see what options you have available to you. I'm in Orlando and can also give you investor friendly title companies and attorneys in the area. Lakeland is about 15-20 min away.


     Thanks Jojn

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @John O'Leary thank you.

    1Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @Jossalyn Wallace, thank you. Yes, Lender does have such an option but they require closing in an LLC with 5 years IO and 25 years amortized.

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @Caroline Gerardo thanks a lot.

    Yes to keeping existing Tenant who brought the deal to me and will be partnering on for future deals. He is a sub contractor who would like the option to buy me out later or get equity in deals.

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @John O'Leary thanks again John.

    I'm ok with paying PITI, not really after initial cash flow right now but it's always good to know the options out there.

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @Brandon Beardt thank you. Yes, I have been reading through the posts on here. Lender did provide metrics but wanted to know if they were in line with the BP community. Almost perfect credit score. Rent $2700 , PITI about $1,800.

    0Reply
  • Jonathan Taylor
    Lender 路 Los Angeles, CA 路 Member since 2017 路 916 posts 路 647 votes
    3y

    @Wendy S. pricing/rate for DSCR depends on the property numbers and the borrower's experience.

    DSCR loans, aka lite doc or business purpose loans, uses the rents you receive on the property and divided by the new loan PITI to receive a ratio. Simple math would be a PITI of 1,000 and rents of 1500. That would be a debt service cover ratio of 1.5. Basically, this property cash flows. FICO, experience, and LTV are also factors but this is the basis of the loan. No need for tax returns, Verification of Employment, or income. I have been through this loan as an investor myself and originate these loans all the time.

    Rates at this time are 6-8% depending on the factors mentioned above.

    DM with questions as Im happy to help.

    0Reply
  • Caroline Gerardo
    Lender 路 Washington DC 路 Member since 2015 路 2k+ posts 路 2k+ votes
    3y

    Make sure you run credit on tenant

    0Reply
  • Robin SimonBusiness Member
    Lender 路 Austin, TX 路 Member since 2022 路 5k+ posts 路 4k+ votes
    3y
    Quote from @Wendy S.:

    Hi BPers

    So I'm looking to buy an off market property in Lakeland FL with a DSCR loan.

    Can anyone shed some light on the area, this loan product and possible recommendations for closing attorneys in Lakeland FL, I'm in GA.

    I'm seeing interest rates 7.5 to 8.5% with 25% down. Speaking with another Lender for 20% Dp as well.

    PV should be around $200K with existing Tenant remaining in place.

    Pp = $150/160K

    Thanks


    Hey - I'd love to help. Also, check out the latest featured article on BiggerPockets on all about DSCR loans and how to get the best terms!

    https://www.biggerpockets.com/...

    [email protected]
    Harpoon Capital514 Reviews
    WebsiteView Page
    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @Jonathan Taylor thanks. I do understand the gist from what u have read. The only reason I am considering a DSCR presently is because 2 opportunities came up and for the 1st time I am behind on my taxes which I am looking to get up to speed this week into next for IRS acceptance.

    Who knows I might still be able to go conventional in time for closing but 1 property, time is of the essence.

    DSCR is about 1.5

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @Caroline Gerardo thanks. Aye, this is where I come in,Tenant's credit is bad but his work is good. He initially was doing a rent to own but seller wants to be paid off. So in essence I will buy outright and pay off debts including his. He will stay on, continue to pay rent and continue working on projects between states with me.

    0Reply
  • Caroline Gerardo
    Lender 路 Washington DC 路 Member since 2015 路 2k+ posts 路 2k+ votes
    3y

    My crystal ball shows rain

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @Caroline Gerardo 馃槂 馃槉. I know. No reward without calculated risks. Worst case, I can just resell the property.

    0Reply
  • Jonathan Taylor
    Lender 路 Los Angeles, CA 路 Member since 2017 路 916 posts 路 647 votes
    3y

    @Wendy S. if your timeline to conclude taxes are in time, conventional is a better rate option but you can close with a DSCR bridge product (no PPP) and refi into a conventional loan when you get your taxes all cleared up. DSCR of 1.5 is based on what rate?

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @Jonathan Taylor, yes I am hoping to get taxes in order for conventional but also looking to go under contract for another on market so DSCR as time is of the essence on that one.

    1.5 or actually 1.7728 at 25% DP and 8.5% interest.

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @Caroline Gerardo I sent msg to your inbox.

    0Reply
  • Kristen L GarnerBusiness Member
    Lender 路 Phoenix, AZ 路 Member since 2021 路 451 posts 路 287 votes
    3y

    Hi! I do a lot of DSCR loans in Lakeland and Doma Title has always done a great job for me. 20%-25% is standard downpayment for DSCR. Best of luck! -Kristen

    [email protected]213-880-0434
    0Reply
  • Shawn McCormickPro Member
    Realtor 路 Central Florida-Orlando 路 Member since 2014 路 1k+ posts 路 892 votes
    3y

    @Wendy S. I have lenders and a fantastic title company in Lakeland if you haven't found one yet. It is owned by husband and wife investor team and very familiar with Lakeland and closing on sub-2, wholesales, double close etc. 

    Let me know if you still need help for either and of course, if you aren't represented, I'd be happy to help you there too.

    Best of luck!

    0Reply
  • Fedna Guillaume
    Member since 2018 路 5 posts 路 1 vote
    3y

    @Wendy S. Hello I know someone who specializes in this

    0Reply
  • Wendy S.
    OP
    Ellenwood, GA 路 Member since 2016 路 267 posts 路 70 votes
    3y

    @Robin Simon. Read. Thank you.

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free