Is it even possible to get DSCR loan?

Detroit, Michigan
Creative Real Estate Financing
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Is it even possible to get DSCR loan?

Tzvi Keisar
Member since 2021 · 13 posts · 7 votes

Hi experts,

I'm a beginner investor looking to purchase properties under an LLC. Is it even possible for me to get a DSCR loan? Or is my only option a conventional loan?

Anyone can recommend a lender for DSCR or even conventional loan who will be willing for the property's title to be under an LLC?

Looking for properties in the Lansing - Detroit areas. Loan will be for ~80% LTV of ~$100k property.

Thanks!

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Patrick DruryBusiness Member
Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
3y

@Tzvi Keisar
I am seeing 75% LTV across the board in Columbus unless you pay a higher rate/ points. Also, there's no reason to make a DSCR rate any higher. You can use a DSCR lender to close in an LLC.

[email protected]614-412-4565
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  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 665 votes
    3y
    Quote from @Tzvi Keisar:

    Hi experts,

    I'm a beginner investor looking to purchase properties under an LLC. Is it even possible for me to get a DSCR loan? Or is my only option a conventional loan?

    Anyone can recommend a lender for DSCR or even conventional loan who will be willing for the property's title to be under an LLC?

    Looking for properties in the Lansing - Detroit areas. Loan will be for ~80% LTV of ~$100k property.

    Thanks!

    Hi Tzvi,

    As an investor, it may be easiest for you to avoid conventional financing and go the DSCR to avoid the headache of red tape tied up with quasi govt loans. DSCR will allow you to do what you’re asking. I’ll send you some additional info directly 
    [email protected]860-538-3672
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    0Reply
  • Troy DeLong
    Real Estate Agent · Lansing, MI · Member since 2020 · 170 posts · 91 votes
    3y

    @Tzvi Keisar

    That is absolutely an option for a DSCR loan. As a newer investor, the 80% LTV might be a stretch. Until you get your portfolio built up and build a relationship with some lenders, you might be looking more at 65%-70% LTV. But, that's for the lender to decide when you speak with them.

    I highly recommend you reach out to Greg Huegel with Lima One Capital (Hard Money lender). They've got great loan options across the board for what you're wanting. 

    Greg Huegel  /   864-249-7020

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Tzvi Keisar as long as the property is profitable, why wouldn't you qualify for a DSR loan?

    Try CIVIC www.civicfs.com

    [email protected]248-209-6824
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    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    3y
    Quote from @Tzvi Keisar:

    Hi experts,

    I'm a beginner investor looking to purchase properties under an LLC. Is it even possible for me to get a DSCR loan? Or is my only option a conventional loan?

    Anyone can recommend a lender for DSCR or even conventional loan who will be willing for the property's title to be under an LLC?

    Looking for properties in the Lansing - Detroit areas. Loan will be for ~80% LTV of ~$100k property.

    Thanks!

     Yes - this is very possible, @Jack Tulloch can help with this. The only issue is there might be a small LTV restriction from most DSCR lenders for whats classified as "first time investors" - so you may max out at 75% instead of 80% LTV

    [email protected]
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    1Reply
  • Issac San Miguel
    Lender · Austin Texas · Member since 2022 · 319 posts · 156 votes
    3y

    As everyone else has said - completely possible - small ltv adjustment to 75% with a qualified property.

    All rates are not created equal.  It is important to shop a few lenders.

    1Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    DSCR will allow you to close in an LLC wit no experience. Conventional/commercial lending won't touch you unless you have proven financials.

    1Reply
  • John Paul Serenas
    Virtual Assistant · 1850 Lee Rd Ste 347 Winter Park Florida, 32789 · Member since 2023 · 45 posts · 14 votes
    3y

    Yes, it is possible for a beginner investor to get a DSCR loan to purchase properties under an LLC. DSCR (debt service coverage ratio) loans are typically used for commercial properties and are based on the property's income-generating ability rather than the borrower's creditworthiness. Your only option may not be a conventional loan as you have other loan options available. if you nee help I can refer you to a company I know feel free to message me!

    0Reply
  • Matthew Wolk
    Lender · Tampa, FL · Member since 2022 · 79 posts · 28 votes
    3y
    Quote from @Tzvi Keisar:

    Hi experts,

    I'm a beginner investor looking to purchase properties under an LLC. Is it even possible for me to get a DSCR loan? Or is my only option a conventional loan?

    Anyone can recommend a lender for DSCR or even conventional loan who will be willing for the property's title to be under an LLC?

    Looking for properties in the Lansing - Detroit areas. Loan will be for ~80% LTV of ~$100k property.

    Thanks!


    You cannot close any conventional loan in an LLC. You could close an investment conventional in your own name and than transfer title to the LLC after closing though. For DSCR, you can close in an LLC. Most lenders want to see the loan amount to be at least 100K but there are lenders who will go down to 75K for DSCR.

    0Reply
  • Tzvi Keisar
    OP
    Member since 2021 · 13 posts · 7 votes
    3y

    wow, thanks for all the replies!

    75% LTV will not be a problem (at least not for the first few properties :) )

    One question on the DSCR loan process - why do lenders require FICO score if the loan is on the LLC? If I'm shopping from several lenders and each one of those do a hard inquiry on my credit score I'll lose quite a bunch of points in the process...

    0Reply
  • Nathan Harden
    Real Estate Agent · Puyallup, WA · Member since 2022 · 551 posts · 379 votes
    3y

    It all comes down to what the value of your property is. Most DSCR lenders are not loaning on properties that are less than $100k. I am not sure what the value of the property is that you are talking about but I know some areas of Detroit you can get a house for like $30k, if that's the case, then a DSCR lender will not loan on it.

    1Reply
  • Marcos Gonzalez
    Lender · Auburn, AL · Member since 2018 · 67 posts · 35 votes
    3y

    Yes you can do DSCR loan and close in a LLC.

    0Reply
  • Caroline Gerardo
    Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    3y

    FICO score is one piece of the interest rate, it's a required piece. DM me your score and I can give you rate range.

    You also need reserves (all your bills and proposed multiplied by 12 or 24 depending on program).

    Property MUST cash flow with real market rents. You need a lease and deposit check cashed at closing so can't be a rehab.

    2Reply
  • Walter Correia
    Lender · Charlotte, NC · Member since 2015 · 124 posts · 22 votes
    3y

    Hi @Tzvi Keisar,

    Feel free to reach out, my company can help out with financing.

    0Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    3y

    @Tzvi Keisar
    I am seeing 75% LTV across the board in Columbus unless you pay a higher rate/ points. Also, there's no reason to make a DSCR rate any higher. You can use a DSCR lender to close in an LLC.

    [email protected]614-412-4565
    Reafco-556 Reviews
    View Page
    2Reply
  • Jim WellingtonBusiness Member
    Real Estate Agent · Saint Clair Shores, MI · Member since 2022 · 73 posts · 51 votes
    3y

    Hello- My partner company has DSCR loans with zero origination fees, loans with only 20% down, and many other unique programs. Feel free to connect and we can further discuss.

    [email protected]586-204-2010
    1Reply
  • Marie Mcfarlin
    Rental Property Investor · atlanta ga · Member since 2016 · 10 posts · 5 votes
    3y

    The hardest situation I’ve ran into is finding lenders that will lend under 100k in Michigan. 
    Most dscr lenders aren’t grasping that the average rent ready home isn’t 100k in Michigan, let alone if you want to short term bridge and rehab you will run into issues getting a long term refi if Arv isnt 100k +

    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    3y
    Quote from @Marie Mcfarlin:

    The hardest situation I’ve ran into is finding lenders that will lend under 100k in Michigan. 
    Most dscr lenders aren’t grasping that the average rent ready home isn’t 100k in Michigan, let alone if you want to short term bridge and rehab you will run into issues getting a long term refi if Arv isnt 100k +


    Agreed - its somewhat rare to find a DSCR lender that will go under $100k anywhere, but there are options at $75k with some lenders, including Michigan

    [email protected]
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    1Reply
  • Salvatore Lentini
    Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
    3y

    @Tzvi Keisar - Not only is it possible to get a DSCR loan, it's what many real estate investors use to finance their deals. Many times it's very difficult to get traditional financing on an investment property. Feel free to message me with any questions. I've built a portfolio closing in on 200 rentals and have a handful of investor friendly lenders I work with.

    2Reply
  • Jonathan Taylor
    Lender · Los Angeles, CA · Member since 2017 · 916 posts · 647 votes
    3y

    @Tzvi Keisar you're going to run into issues with these smaller properties with loans sub 100k in terms of rates and lenders willing to offer competitive pricing. DSCR loans would have higher rates compared to loans with 100k+ loan amounts. Plus its harder to debt cover so expect 25-30% down.

    Rates and terms are high right now but if the property can work now, you can refi out once rates drop.

    0Reply
  • David Pollard
    Investor · Chatham ON, Canada · Member since 2022 · 9 posts · 1 vote
    3y
    Quote from @Devin Peterson:
    Quote from @Tzvi Keisar:

    Hi experts,

    I'm a beginner investor looking to purchase properties under an LLC. Is it even possible for me to get a DSCR loan? Or is my only option a conventional loan?

    Anyone can recommend a lender for DSCR or even conventional loan who will be willing for the property's title to be under an LLC?

    Looking for properties in the Lansing - Detroit areas. Loan will be for ~80% LTV of ~$100k property.

    Thanks!

    Hi Tzvi,

    As an investor, it may be easiest for you to avoid conventional financing and go the DSCR to avoid the headache of red tape tied up with quasi govt loans. DSCR will allow you to do what you’re asking. I’ll send you some additional info directly 

     I'm also looking for more information on this.

    Could we connect Devin Peterson

    0Reply
  • Steve Meyers
    Real Estate Agent · San Diego, CA · Member since 2015 · 190 posts · 77 votes
    2y

    Curious if anyone on this thread has had any luck finding a DSCR lender to lend sub $100K yet?

    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2y

    DSCR Loans down to $75k are freely available

    [email protected]
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    0Reply
  • Caroline Gerardo
    Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    2y
    Quote from @Tzvi Keisar:

    wow, thanks for all the replies!

    75% LTV will not be a problem (at least not for the first few properties :) )

    One question on the DSCR loan process - why do lenders require FICO score if the loan is on the LLC? If I'm shopping from several lenders and each one of those do a hard inquiry on my credit score I'll lose quite a bunch of points in the process...

    FICO determines part of your interest rate AND YOU as a human are personally guaranteeing the loan. It's not a commercial loan. You should not apply with many lenders, you can show them your mortgage middle FICO (not the consumer score) and tell them the property location, price, condition, type and then ANY DSCR or NonQM lender will tell you the interest rate at that day. Rate change daily... You need to be in contract on a specific property and apply to lock

    @Steve Meyers  higher than $75000 loan amount is available but the subject property needs to be leased at closing not a rehab property if your FICO is good to great and you have the money in the bank for closing and reserves.

    lots of options just ask

    0Reply
  • Jonathan Taylor
    Lender · Los Angeles, CA · Member since 2017 · 916 posts · 647 votes
    2y

    @Steve Meyers we have lenders who can take sub 100k deals, what is your scenario or DM me if you have specific questions. 

    0Reply
  • Jim WellingtonBusiness Member
    Real Estate Agent · Saint Clair Shores, MI · Member since 2022 · 73 posts · 51 votes
    2y
    Quote from @Steve Meyers:

    Curious if anyone on this thread has had any luck finding a DSCR lender to lend sub $100K yet?

     @Steve my partner company has options below look. Let’s connect to discuss. 

    [email protected]586-204-2010
    0Reply
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