DSCR lenders that refi coliving on per-room income?

Question

I'm about to purchase an 8-bed, 8-bath home that I plan to operate as coliving, with each room rented individually. Once it's stabilized, I'll want to refinance, and I'd like to line up lenders now who will value and underwrite it based on the per-room income rather than as a standard single-family rental.

Has anyone refinanced a coliving property this way? I'd appreciate names of lenders or loan officers who have done it.

Brandye Richardson · Answer

Uzoma, your eight-bedroom coliving strategy may require a DSCR or portfolio lender experienced with individually leased rooms rather than standard single-family market rent. The Connection Power To Wealth can help review the situation and available options before you purchase. Please have the property location, purchase price, projected room rents, acquisition financing and stabilization timeline available. CALL NOW: 813-696-7548. Any option remains subject to complete property and lender review.

Erik Estrada · Answer

You will need to see if you can locate a local commercial lender. The tough part is the fact that it is a 1-4 Residential unit.

There are lenders that are OK with this arrangement and will not count the rental income per se.. but the rate will probably be in the high 9-10% range. But if you can find a local lender, that will be your best bet.

Justin Dube · Answer

While I have not worked with Ocean Capital or Coast2Coast, I have refinanced several co-living houses. They are treated as any other DSCR, which means they qualify on market rent. No lender is going to underwrite based on income that is several multiples higher than normal market rent, because they would then be loaning more than the house is worth. It just isn't a thing, however, perhaps you could alternatively get an SBA loan using that income to qualify. I don't do SBA loans, just a road you might try.

Uzoma Onyeije · Answer

Thanks for the feedback. I asked another investor that question earlier today and he also gave me similar advice. He also mentioned Ocean Capital Lending markets and Coast2Coast Mortgage. I will talk with them tomorrow.

Victor So · Answer

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DSCR lenders that refi coliving on per-room income?

DSCR lenders that refi coliving on per-room income?

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