SUCCESS STORY: When Conventional Financing Became the Problem
SUCCESS STORY: When Conventional Financing Became the Problem
Closed today: a 3-unit investment property in New Hampshire.
My client is an experienced investor who already owns four investment properties.
When he found his next 3-unit property, his Realtor recommended that he speak with me about financing. But after banking with the same large New England bank for more than 20 years, he was confident they would take care of him.
Unfortunately, the process became increasingly difficult.
The bank asked for seemingly endless documentation—everything just short of a blood sample and hair follicle.
The result?
Three mortgage commitment extensions. Two closing extensions. And still no loan.
That's when he called me.
Rather than trying to force an experienced investor with multiple properties through conventional income qualification, we analyzed the property itself.
The solution: DSCR financing.
With DSCR, qualification can focus on the rental income generated by the property rather than relying on traditional personal-income documentation.
The listing agents were understandably skeptical after all the delays, so I spoke with them directly, explained how our financing was different and why we wouldn't need the mountain of documentation the bank had been requesting.
Twenty days later, we closed.
The lesson?
Conventional financing can be an excellent option. But the financing strategy that worked when you bought investment property #1 may not be the best strategy when you're buying #5.
For investors purchasing 1–4 unit properties, sometimes DSCR provides a much better path.
And my favorite part of today's closing?
He's already looking for his next investment property.
If you're considering a duplex, triplex or four-family, I'm happy to help analyze the scenario before you make the offer.
Sometimes conventional wins. Sometimes DSCR wins.
The key is choosing the right financing strategy for the investor and the property.
Justin S. Tulman, Vice President - NMLS#13286
Fairway Home Mortgage Corp.