Looking for DSCR lending

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Looking for DSCR lending

Michael Y.
Las Vegas, NV · Member since 2018 · 9 posts · 3 votes

I'm looking for DSCR lenders in the Tulsa area, any recommendations? Also does not owning a primary result in rejection.

Much appreciated, thank you. 

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Zach Edelman
Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
2y

Would recommend looking at Bigger Pockets list of recommended DSCR lenders. Great resource.

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2y
    Quote from @Michael Y.:

    I'm looking for DSCR lenders in the Tulsa area, any recommendations? Also does not owning a primary result in rejection.

    Much appreciated, thank you. 


     Hi Michael, 

    Is this for a purchase or refinance? 

    Can you show you have been living somewhere else and paying rent for the past 12 months? Or Utility bill?

    [email protected]818-269-7983
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  • Michael Y.
    OP
    Las Vegas, NV · Member since 2018 · 9 posts · 3 votes
    2y

    For purchase. Yes I can show anything you need!

    0Reply
  • Zach Edelman
    Lender · New York, NY · Member since 2022 · 1k+ posts · 1k+ votes
    2y

    Would recommend looking at Bigger Pockets list of recommended DSCR lenders. Great resource.

    1Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 677 votes
    2y
    Quote from @Michael Y.:

    I'm looking for DSCR lenders in the Tulsa area, any recommendations? Also does not owning a primary result in rejection.

    Much appreciated, thank you. 


    As long as you can provide 12 months of primary housing you're go for DSCR. Happy to connect

    [email protected]860-538-3672
    ProAlpha Capital55 Reviews
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    0Reply
  • Andrew Zamboroski
    Lender · Member since 2021 · 498 posts · 131 votes
    2y
    Quote from @Michael Y.:

    I'm looking for DSCR lenders in the Tulsa area, any recommendations? Also does not owning a primary result in rejection.

    Much appreciated, thank you. 

    As many others have said, not necessarily a deal breaker! Is this your first property in your portfolio? Happy to connect and help if I can!
    0Reply
  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2y
    Quote from @Devin Peterson:
    Quote from @Michael Y.:

    I'm looking for DSCR lenders in the Tulsa area, any recommendations? Also does not owning a primary result in rejection.

    Much appreciated, thank you. 


    As long as you can provide 12 months of primary housing you're go for DSCR. Happy to connect


    I would say this is probably generally true but I'd also say these definitions can vary widely (and annoyingly) among DSCR Lenders - an area that could certainly use some standardization in the market

    [email protected]
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  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 524 votes
    2y

    You will have less lending options if you don't own a primary and this is not your first investment property but there are lending options out there. DSCR lenders have different guidelines depending on the lender as they sell their loans on the back end to replenish their cash for new loans to different investors who have varying criteria as they set it. You will have a lot more options for loan amounts over $100K. It's more important to work with a lender or a broker that specializes in DSCR loans. The location isn't as important as most lenders work in different states.

    In case helpful, more info on DSCR loans: DSCR loans won't use your income to underwrite the loan.

    DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

    [email protected]818-770-0340
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  • Brayden Hrycko
    Lender · Allentown, PA · Member since 2023 · 207 posts · 38 votes
    2y

    Hello @Michael Y.,

    We at the One Brokerage service Oklahoma. I would be happy to connect. You do not need to own a primary. 

    0Reply
  • Timothy Hero
    Lender · United States · Member since 2020 · 1k+ posts · 499 votes
    2y

    We have to be careful posting here, since this isn't the marketing section, but I know a guy lol

    0Reply
  • AJ ExnerPro Member
    Lender · Springfield, MO · Member since 2023 · 661 posts · 320 votes
    2y
    Quote from @Michael Y.:

    I'm looking for DSCR lenders in the Tulsa area, any recommendations? Also does not owning a primary result in rejection.

    Much appreciated, thank you. 


    Hey Michael,

    Hope you found an answer on this, but shouldn't need to own to utilize find DSCR.

    I know that you can run into some title stuff in OK in general though. My experience with my clients there is that any kind of purchase you do they run FULL title everytime, which can certainly uncover a few things and delay the process. Have you purchased in OK before or is this the first?

    [email protected]417-427-2612
    0Reply
  • Rashawn Dally
    Lender · Farmington, CT · Member since 2021 · 11 posts · 5 votes
    2y

    hi, good question. i have seen this come up before in the past. its hit or miss with lenders tbh. i definitely have come across a few that do not require this.

    0Reply
  • Brittany MinocchiBusiness Member
    Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
    2y

    Hey Michael - 

    If you can show proof of on-time housing payments for 12+ months, you should have some luck. Be aware of the different prepayment penalty options across lenders when comparing....anywhere from 0-5 years is common. Typically the longer the PPP, the lower your rate. A refinance or a sale will trigger the PPP (something to keep in mind right now, as "they" predict that rates will fall this year). If you have any questions, feel free to reach out! 

    [email protected]330-354-6590
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  • Nick BelskyBusiness Member
    Lender · Orlando, FL · Member since 2021 · 1k+ posts · 704 votes
    2y

    @Michael Y.

    Chat with @Zach Edelman.  They are awesome and Easy to work with...

    Cheers!

    [email protected]
    Belsky Mortgage, LLC521 Reviews
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  • David ChungPro Member
    Lender · Orange County, CA · Member since 2017 · 56 posts · 14 votes
    2y
    Quote from @Michael Y.:

    I'm looking for DSCR lenders in the Tulsa area, any recommendations? Also does not owning a primary result in rejection.

    Much appreciated, thank you. 


    Not owning your primary residence can result in a rejection for some lenders. Other lenders are ok with it. I'm a DSCR loan broker and I can connect you to the best financing for you. Give me a call

    [email protected]714-334-8110
    1Reply
  • Charlie GonzalezPro Member
    Lender · Charlotte, NC · Member since 2023 · 70 posts · 10 votes
    2y

    Hi Michael, do you currently have any investment properties in your portfolio?

    0Reply
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