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Creative Real Estate Financing

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DSCR Financing Recommendations

Matthew Schiefer
Posted Apr 7 2023, 15:59

Hello all, 

I just purchased a duplex and will close in a few weeks. I used traditional financing (30 year fixed) on that deal. There are so many more deals out there. I am looking for recommendations and help with DSCR financing options. Do I need to use local options or are there better firms depending on the state you purchase in or the specific deal? Also, will DSCR work for both single family and multi-family?

I appreciate all the knowledge and wisdom this forum offers. Thank you in advance. 

Matt

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Brandon Beardt
Pro Member
  • Lender
  • Pasadena, CA
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Brandon Beardt
Pro Member
  • Lender
  • Pasadena, CA
Replied Apr 7 2023, 17:00
Quote from @Matthew Schiefer:

Hello all, 

I just purchased a duplex and will close in a few weeks. I used traditional financing (30 year fixed) on that deal. There are so many more deals out there. I am looking for recommendations and help with DSCR financing options. Do I need to use local options or are there better firms depending on the state you purchase in or the specific deal? Also, will DSCR work for both single family and multi-family?

I appreciate all the knowledge and wisdom this forum offers. Thank you in advance. 

Matt


 Hi Matt,

Congrats on your new duplex purchase! Most if not all DSCR lenders can lend nationwide, giving you a wide array of different products to choose from. Each will have their own set of guidelines and requirements but the general qualification metrics are the same - good FICO score and the property projecting to cashflow each month. DSCR lenders generally lend on 1-4 units, with some actually being able to go up to 8 or 9 units. Once you're past that point, you'd have to look elsewhere, with a commercial lender perhaps. I'd recommend doing some research on some different lenders in the Build Your Team tab above or even other people who respond to your post and reading the reviews left from other Bigger Pockets users themselves.

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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Investor
  • Austin, TX
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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
  • Investor
  • Austin, TX
Replied Apr 7 2023, 18:55

Most mortgage brokers have a DSCR products. What's going to differ are the points each one charges. A good mortgage broker will shop relentlessly for the best rates.

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Chris Davidson
  • Real Estate Agent
  • Boise, ID
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Chris Davidson
  • Real Estate Agent
  • Boise, ID
Replied Apr 8 2023, 07:12

@Matthew Schiefer like the others said yes you will be able to use DSCR options. Also There are many more options out there. Reach out some brokers that specialize in it and go from there.

Best of luck!

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Robin Simon#1 Private Lending & Conventional Mortgage Advice Contributor
  • Lender
  • Austin, TX
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Robin Simon#1 Private Lending & Conventional Mortgage Advice Contributor
  • Lender
  • Austin, TX
Replied Apr 8 2023, 07:34
Quote from @Matthew Schiefer:

Hello all, 

I just purchased a duplex and will close in a few weeks. I used traditional financing (30 year fixed) on that deal. There are so many more deals out there. I am looking for recommendations and help with DSCR financing options. Do I need to use local options or are there better firms depending on the state you purchase in or the specific deal? Also, will DSCR work for both single family and multi-family?

I appreciate all the knowledge and wisdom this forum offers. Thank you in advance. 

Matt


 Hi Matt - 

I would say for DSCR loans, most of the top lenders are national platforms so not really much of a need to go with local options as the national lenders will likely have more options and better terms

For questions on DSCR loans like the single family vs. multifamily, I'd recommend these articles to learn more:

DSCR Loans: What Are They And How To Get The Best Terms

https://www.biggerpockets.com/...


DSCR Loans: How To Use Pro Strategies To Save More And Make More

https://www.biggerpockets.com/...