DSCR loan AND loan for Down Payment?

Question

Hi amazing BP community! I've had such great success in connecting here!
i have a Buy and Hold opportunity in Memphis and am reaching out for a DSCR loan, but also am looking to find ways to finance my down payment and closing costs, and hope to make the number still work. Any thoughts, plans, schemes I could consider to accomplish this?

Mike Grudzien · Answer

Lenders need to see that the borrower has some "skin in the game".

Caleb Brown · Answer

I would not leverage the DP. You could have someone loan you or do a private loan but that's way too risky. Save up the DP then do it. If you are wholesaling focus on closing deals and saving up

Zoe Brennan · Answer

Hey! Congrats on locking in that Memphis deal 👏 A DSCR loan is perfect for buy and holds, but I’d definitely look into using other people’s money for the down payment instead of taking out another loan.

You could use a bridge loan, but depending on the rate, it might just cut into your cash flow for no reason. Instead, think about:

• JV or equity partners — someone funds the deal, you handle the rest
• Private lenders — short-term money from your network (even at 8–10%) could still work if the numbers are solid
• HELOC or cash-out from another property if you’ve got any equity to tap

JV or equity partners — someone funds the deal, you handle the rest

Private lenders — short-term money from your network (even at 8–10%) could still work if the numbers are solid

HELOC or cash-out from another property if you’ve got any equity to tap

Borrowing for the down payment means you're basically paying interest twice — on the loan and on the DSCR — which eats up your return. So I’d try to structure it in a way that keeps your ROI looking good long-term.

Let me know if you wanna brainstorm more ideas!

Chris Seveney · Answer

DSCR Lenders will not let that happen - flat out. We work with over 30 of them and not 1 would allow that  - also note your DSCR ratio when you get to higher LTV will have to be above 1.25 and proven as well as a very high credit score.

better to bring on business partner - but if this is memphis my guess is numbers look great on paper but how are they in reality?

Patrick Roberts · Answer

You will not be able to borrow the downpayment unless it's coming from a separate loan against the equity in another asset (such as a cashout refi on another property). Absolute max LTV for 99% of DSCR programs is 85% (15% down). 20% down is much more realistic if you want decent terms.

Mike Grudzien · Answer

Leverage every element of the deal?  Risky.  Expensive.

Chris Peregoy · Answer

@Zoe Brennan thank you for the insight here! I am looking at private funding for the DP, more just wondering if that's even possible, but seems it is, so long as the two are separate of each other. Cash flow considerations of course too..

Chris Peregoy · Answer

@Caleb Brown fair enough. Focus is wholesaling, this lead came in from an area that's mostly buy and hold, so setting an arv and marketing to a fix and flip would be more difficult than trying to make the numbers work to buy...or so I was trying to figure

Chris Peregoy · Answer

@Chris Seveney LTV is above 1.25, potentially seeking 68K on 82k purchase, monthly rent at $1200 in 38106 zip code. Seller had tenant last 5 years at $1100

Chris Peregoy · Answer

@Patrick Roberts yes I would source the loan for DP elsewhere

DSCR loan AND loan for Down Payment?

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