DSCR options for multiple SFRs in one package...

[Matt Lewis]

Hello all...

Long time lurker, first time poster.

Have a DSCR related question. I am in the process of purchasing multiple (6-8) SFRs in a package. Going to need a blanket loan to fund them. I am looking for the following:

- 20% down (open to going higher, would like to stick with 20%)

- 30 year financing

- No Pre-payment penalty

In the past I have always used traditional financing methods for purchasing rentals. This is my first venture into DSCR land.

I have spoken with a couple different lenders, and they are unable to get around the pre-payment penalty. 

It seems that the pre-payment penalty is the sticking point.

Is a blanket DSCR loan for 6-8 SFR homes with no pre-payment penalty available in the marketplace?

Best regards, 

Matt

[Mike Kirby]

Quote from @Matt Lewis:

Hello all...

Long time lurker, first time poster.

Have a DSCR related question. I am in the process of purchasing multiple (6-8) SFRs in a package. Going to need a blanket loan to fund them. I am looking for the following:

- 20% down (open to going higher, would like to stick with 20%)

- 30 year financing

- No Pre-payment penalty

In the past I have always used traditional financing methods for purchasing rentals. This is my first venture into DSCR land.

I have spoken with a couple different lenders, and they are unable to get around the pre-payment penalty. 

It seems that the pre-payment penalty is the sticking point.

Is a blanket DSCR loan for 6-8 SFR homes with no pre-payment penalty available in the marketplace?

Best regards, 

Matt

I’ve gotten 9 DSCR loans since I couldn’t get conventional loans anymore. I have had PPP on every one of them because the rates were too high without the PPP. I’m a long term buy and hold guy so it doesn’t really matter to me. 80% is going to be tough to make a DSCR of 1.2 work at today’s rates too. Some lenders will use 1.1 or 1.0 but unless you are buying at a huge discount 80% is probably not realistic.