Does anyone have experience using DSCR Loans as a cash out refinance option?

Question

Looking for general information or advice on using DSCR Loans as a cash out refinancing. If you have used this option before or are a lender who has helped clients with this type of product please comment.

I am looking at using this type of loan for BRRRR projects and would like to see if it's a strategy that could work.

I am looking at using this type of loan for BRRRR projects and would like to see if it's a strategy that could work.

Tony Severance · Answer

My clients regularly use DSCR cash outs to fund purchases of new properties.  It is a very sound strategy for utilizing the equity in your properties to acquire more.  However, there are pros and cons that need to be weighed against each other.

Brandon Beardt · Answer

Hi Richard,

I would say most DSCR lenders require a minimum property value of $100K. We're different in that regard in that we can underwrite loans with minimum property values down to $75K with cash out eligibility after only 3 months of being on Title. This helps you expand and scale a bit faster if that is your goal. Explore the different options available to you because every DSCR lender is different in their guidelines and process. Best of luck.

Robin Simon · Answer

Would love to help and answer any questions about the DSCR product, especially with regards to BRRRR.  Also see below some long articles I've written for BiggerPockets all about DSCR which can potentially answer some of your questions pre-emptively!

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/...Multifamily DSCR Loans: A New High-Impact Loan Option For Real Estate Investors?

https://www.biggerpockets.com/...12 Frequently Asked Questions (And Answers) About DSCR Loans

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

John Morgan · Answer

You’re probably not going to find a lender to do one for under 100k.

Richard Ruedas · Answer

Thank you for all the recommendations and comments.  I spoke to my current DSCR lender that I use for long term purchases and they have a minimum loan amount of 100k, but the fix/flip projects we are working on will have an ARV of 100k or less.

Do any of you have experience with DSCR Loans or cash outs under 100k?

I will definitely connect with some of you and others to see what else is available.

Thank you again.

Greg Clark · Answer

@Richard M Ruedas

I’ve done a handful of DSCR on rentals. 75% LTV (now with my lender you need a 740+ to get 75 and not 70%)

Happy to answer any specific question

Ryan Stuckey · Answer

As long as the cash flow is sufficient to service the loan (hence DSCR), you can expect a 65-75% LTV loan amount depending on your credit score

Devin Peterson · Answer

Hi Richard. I’d be happy to tell you all about the DSCR products. Generally, this would be the last step on the BRRRR process if you haven’t done one before. Happy to connect and find you the best deal.

Does anyone have experience using DSCR Loans as a cash out refinance option?

Does anyone have experience using DSCR Loans as a cash out refinance option?

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