DSCR - Cash at closing / Cash reserves
Thanks to BP community. Bunch of knowledge out there which we could lean on espcially from overseas. Would apprciate if some of the lending gurus / specialists could guide me on my below scenario
Overseas investor (NZ citizen resding in NZ). BRRRR is my model. I am in the process of cash - out refi' ing 4 of my SFR's in TN. All of them are under one LLC and currently are financed with local Hard money lender - total ARV is about 480K with DSCR about 1.2 - individually. Was pushing for 75% LTV on this refi but eventually had to accept 65% as lenders needed guarantors (who are US residents) with 21% stake in my LLC (infact someone asked me 81%.....lol) to lend anything more than 65%.
Spent about 4 motnhs to find a lender who could lend 65%. Went well with Refi till we hit another block for "cash at closing". Lender is asking for a cash at closing (cash reserves as some lenders calls it) to the extent of 70 - 80K in USA banks (which is about 20% of the mortgage loan amount). Understand 6 months of PITI which in this case comes to about 15K at about 9% interest. They also say that each property needs to be considered individual mortgage - meaning high Origination and processing costs. Few questions
- Firstly why it should be treated as individual SFR's and cant be done as portfolio?
- Does LTV should be that low without any guarantor ? dont mind another point up on the interest rate, it will still will qualify 1.15/1.1 DCSR
- Cash at closing requirment (80K) is extremely high, are their any new rules for overseas investors?
- I have few other investments in other countries - could the cash at closing needs to be in USA? Cant show 80K but 20K in other countries bank accounts is no good?
- If I add Guarantor with 21%, what advantages I may get? Also how does affect US residents credit score? Dont want to block their investment plans!!
- Will my NZ credit score valid in USA?
- Lastly if I get my ITIN help anyways (understand that it helps for FIRPTA purpose) - better LTV, Better interest points, Cash at closing etc?
Many thanks in advance..