Getting confused about DSCR & commercial loans

[Annette Barnett]

Hi again,

Under contract to sell SF home - closing on Sept 7th, 1031 clocks start ticking to identify and purchase multi-family property.   

I'm starting to reach out to a number of you (lenders) who have responded to my posts, thank you!  I've got some potential properties that you can run numbers on.  

MY CONFUSION: I have seen/read that if I get a DSCR commercial multifamily loan (5 units or more), I can get rates in the 5s or 6s??  Such as here:

https://trussfinancialgroup.com/debt-service-coverage-ratio-...

Where it shows the starting rate of 5.97%.  Yes, this could be bait and switch.  Called and left a message. 

I've also heard that I can get a lower DSCR rate if I work with a lender who requires my taxes? Everywhere I look online I read that DSCR loans don't require taxes. Seems like this is not always the case?

Little help please . . 

~Annette

[Devin Peterson]

I dont know who you spoke to but I can assure you there are no DSCR loans for 5+ units out there less than 6%.. Even 7% is skeptical. I have seen the products and priced scenarios out with almost evey dscr lender on BP and beyond. This is fishy. The only time commercial rates are sub DSCR is when you shop a LOCAL strict commercial bank that uses their own index like FLB rate and ads almost nothing into their yield spread. 5yr spread today is roughly 4.5 ... even with commercial institutions and no broker involved for additional hits in rate, you would be around 7.00%