I have a 5–10-unit apartment building under contract in Plymouth County and I'm looking to see who people have been using for lending both private and bank lenders. It's stable but will be around 1.0 DSCR day one. However, there is plenty of room to add value. Also, if anyone has some ballpark terms on what you've been seeing. Any banks offering 12-month IO?
Hi. I am a broker for a DSCR, I can try to help. I did one for myself too on my duplex.
I got a quote from Cape Cod 5 for something that was similarly sized to what you're looking for. They were underwriting at a 1.20X DSCR and they were going to keep it in their portfolio. 4.0% rate with 5 year term, 25 year amortization.
Thank you Mason and Jessica.
@Henry Centola why are you looking for a 12-month io -- is this a value add deal or does it need reno to bring it up to market rent?
If you're not contemplating rehab or are already in leasable condition, you'll be able to get a 30 yr fixed against the property on a DSCR loan (w/o proof of income, property DTI, etc). Rates are in the 4.875% - 6.125% range (for 30 yr fixed rate/term).
Most of the lenders I work with want to see at least 1.10 DSCR. Why looking for a short term loan? We are doing 30 year fixed, fully amortized as low as 4%... for both commercial and residential loans.