Seeking 75%+ cash out DSCR refi (from non-traditional lender?)

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Seeking 75%+ cash out DSCR refi (from non-traditional lender?)

Sam Burnoski
Schaumburg, IL · Member since 2016 · 26 posts · 7 votes

I have a 4 unit in a bridge/rehab loan that I need to refinance. The property is in IL. The property numbers are excellent. I am a very experienced real estate investor and house flipper.

I'm having a hard time finding a lender that doesn't have crazy terms and requirements that will do a 75% DSCR cash out.

It's frustrating because I have the perfect lender for this scenario in WI, but they don't lend on IL properties. I know there has got to be other options out there than what I have found so far.

Maybe there is a bank, credit union, or a private lender that will hold the loan on their own books? 

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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
3y
Quote from @Sam Burnoski:

I need a lender that doesn't have crazy terms and requirements that will do a 75% DSCR cash out.

 Most lenders flinch at cash out but will be fine with rate/term. 

As part of an asset protection strategy and potential refi getting cash without the 'cash out' triggers, I self-encumbered with a mortgage to one of my entites.

My strategy has been bashed as most likely not being able to survive a lenders sniff test. I used my generic sounding  s-corp, executed a note and recorded a mortgage/deed of trust.

The primary reason was to appear encumbered, secondary to get sweet rate/term refi with quiet cash out if needed.

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  • Jack Mawer
    Lender · Member since 2022 · 338 posts · 374 votes
    3y

    Congrats on finishing up your rehab loan! What are the biggest obstacles in regard to "crazy terms" that you have been experiencing from DSCR lenders?

    0Reply
  • Chad Davis
    Lender · Richmond VA · Member since 2012 · 301 posts · 30 votes
    3y

    @Sam Burnoski sent pm

    1Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Sam Burnoski:

    I have a 4 unit in a bridge/rehab loan that I need to refinance. The property is in IL. The property numbers are excellent. I am a very experienced real estate investor and house flipper.

    I'm having a hard time finding a lender that doesn't have crazy terms and requirements that will do a 75% DSCR cash out.

    It's frustrating because I have the perfect lender for this scenario in WI, but they don't lend on IL properties. I know there has got to be other options out there than what I have found so far.

    Maybe there is a bank, credit union, or a private lender that will hold the loan on their own books? 


     Hey Sam, 

    What terms were you looking for? There are several DSCR lenders that have great terms. I am seeing in some instances rates in the high 7s with short prepayment penalties.

    [email protected]818-269-7983
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    0Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    3y
    Quote from @Sam Burnoski:

    I need a lender that doesn't have crazy terms and requirements that will do a 75% DSCR cash out.

     Most lenders flinch at cash out but will be fine with rate/term. 

    As part of an asset protection strategy and potential refi getting cash without the 'cash out' triggers, I self-encumbered with a mortgage to one of my entites.

    My strategy has been bashed as most likely not being able to survive a lenders sniff test. I used my generic sounding  s-corp, executed a note and recorded a mortgage/deed of trust.

    The primary reason was to appear encumbered, secondary to get sweet rate/term refi with quiet cash out if needed.

    2Reply
  • Zach Wain
    Scottsdale, AZ · Member since 2019 · 434 posts · 248 votes
    3y

    @Sam Burnoski - I am not licensed there, but I know a great Mortgage Broker that is and can help.  

    0Reply
  • Alex BekezaBusiness Member
    Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
    3y

    @Sam Burnoski What kind of crazy terms and requirements have you been hearing? DSCR lending should be pretty straight forward (FICO vs. NOI Divided by Debt Service and there's not much else to consider). Things are a far cry from where they were this time last year (more than double in some cases) but we're still seeing floor note rates for DSCR loans around 7.25% or 7.5% depending on who you talk to (12/9/2022) and at 75% LTV this will likely require some buy down but in a lot of cases the cost will break even in a very short time frame (2-3 years).

    [email protected]818-606-8823
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    1Reply
  • Kevin Woodard
    Lender · Nationwide · Member since 2021 · 220 posts · 105 votes
    3y

    DSCR loans are fairly straight forward. 75% in Illinois with good credit and DSCR, shouldn't be too complicated.

    I’ll send over a message to connect. 

    0Reply
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