Multifamily Real Estate: How to Finance! (DSCR Loans) - Easy Street Capital

[Robin Simon]

In this video, Thomas from Easy Street Capital discusses financing options for real estate investors interested in multifamily properties. He explains that multifamily properties consist of 5 or more units and discusses the arbitrary rule that excludes 2-4 unit properties from being classified as multifamily. DSCR lenders, including Easy Street Capital, offer loans for multifamily properties, including mixed-use properties with over 50% residential space.

Thomas highlights key differences between traditional and DSCR multifamily loans. DSCR lenders structure their loans similarly to residential DSCR loans, offering 30-year mortgages that can be fully amortizing or interest-only for the first 10 years. Traditional lenders' multifamily loans resemble those secured by commercial real estate and typically have 5-10 year terms with a balloon payment at maturity. The calculation of the Debt-Service-Coverage-Ratio also differs, with DSCR lenders using the residential property formula while traditional lenders use the commercial real estate formula. Qualification requirements and interest rates also vary between DSCR and conventional multifamily loans.

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