All Forum Posts by: Carrie Matuga

The short answer is maybe. Much of the time it is not a hold up on the lending side, but rather in getting title, insurance or even a BPO/appraisal. Where are you with these items?

@Yael Maroko 

Yes—you can get a DSCR loan on a vacant property, even if it needs a little rehab.
Here’s what you need to know:

Vacancy
• For single-family homes or duplexes, full vacancy is totally fine.
• For triplexes or fourplexes, some vacancy is okay—but they generally can’t be completely vacant.

No Lease? No Problem.
Even if there’s no active tenant or lease, you can still qualify.
A DSCR lender will use a 1007 Rent Schedule (ordered with the appraisal) to determine market rent—and that’s what they’ll use to calculate the DSCR.

No DTI Required
DSCR loans don't use your personal debt-to-income ratio.
They’re based on the property’s ability to pay for itself:

• A 1.0 DSCR means the property breaks even.
• A 1.2+ DSCR usually unlocks better rates and smoother approvals.

Light Rehab Is Usually OK
If the property just needs cosmetic updates (aka a “lipstick remodel”), it’s typically not an issue.
But major repairs or deferred maintenance could disqualify it.

Appraisal Condition Rating Matters
The property must appraise in C1 to C3 condition.
• A C4 rating or worse is often a dealbreaker for DSCR loans.

I'd love to help! I'm an investor and a lender and we can go through your deal to place you with the right option based on your experience, credit, liquidity and the property details. I can give you a few things to think about and the right quesions to ask and to think about - this will be helpful whether you work with me or not. Happy to connect!

@Caitlyn Frizzelle To check to see if a lender is legit, you can look at their website, their social media presence and quite honestly pick up the phone and call and talk to them -- see if they make the time to answer your questions, if they answer and if they don't how timely their response to you is.... Do you gel and does this feel like someone you want tobe a part of your financial journey.   Ultimately the lender you work with should be a relationship and you should talk to more than one. Many people will drop a note that they can do your loans or ask you to DM, but if you post something, do they reach out other than to say "I can do it"? Make sure they take the time to understand you - your strategy, your financial situation, your plan for growth and your experience. Understand too, that every lender has a box within which they are comfortable to lend and that impacts their terms and leverage and a "no" from one is not a "no" from all. And I would expand your box to include lenders and brokers. I think people often paint going the broker route as a bad thing but often it can mean signficantly more options and difference between getting a deal done or not. Also, find out if they are investors themselves... that's not a requirement by any means, but it helps to understand their knowledge base and if they have sat in "your shoes".

@Nick D.I'd start with identifying what your buy box is for your next property and what you are going to need for a purchase. For a cash out refi, you are generally limited to 75% LTV and rates right now are in the mid 7s for good credit and a DSCR over 1.0. If it were me, I would like consider refinancing only 1 of the 2 properties now and considering the second later in 2025 or even early 2026 when rates potentially soften. If you want to run few scenarios reach out.

@Timothy Frazier Yes, the only reason to use HML as a down payment is if the property is "mostly turnkey" AND you don't have the funds to renovate AND you have strong CMA comps from a real estate agent that supports that the fact that you are buying a property that is under valued AND your renovations would push that so that you could refinance. HOWEVER, this is a VERY expensive way to acquire property and can backfire if the new appraisal doesn't come in where you need. Remember HML have a countdown clock and are only good for usually 12 months. DM if is you want to talk other options.

@Joseph Fenner I love your goal and how high you've set the bar. I think to accomplish this you are probably going to need to employ a couple of strategies. I'd suggest you look at BRRRR to force value and minimize downpayment. Depending on the state you are investing in and the LTC to ARV ratio (you should ideally have this be less than 70% for cushion), you can finance up to 100% of purchase and renovation (that does not mean no closing costs but it can mean no downpayment). You can also look at creative financing/subto or owner finance as an option and finally there are DSCR options that will allow you to go up to 85% of purchase (but there is a fairly severe interest rate penalty), so I'd recommend staying in the 70-80% range. With a combination of all 3, you could hit your goal and then use your cashflow to start to help you in subsequent years.

@Jason Smith you may want to consider moving a few of those loans with comparable current interest rates over into an LLC and refinancing them into a DSCR product. I believe you are limited to 10 loans for you and 10 for your wife, but even though they are rented and bringing in income they go against your DTI.

@Johnny McKeon I think I would need to know more about your deal specifics - If I were working with you, I'd want to know what is your credit? how much experience do you have? What is the DSCR on this quad? Can you afford to move to 75% LTV instead? The rate is impacted ultimately by all of these factors.

You have to go with what your gut says about when you think you would refinance and where you think rates will be in 1-3 years. If you think it's going to drop if the fed cuts 5-7 times in the next year, it might make sense to look at an ARM with a 3 year declining PPP instead. How long of a PPP is the current rate of 7.75%?

Happy to talk more. Reach out.

@Ian Bower for a 120K loan, it's in the range of normal. I would say that the UW fee seems low, but processing fee seems high, but they seem to balance each other out and the admin fee is kind of a junk fee. It's hard when lower balance loans like this because the flat fees like processing and underwriting seem high as a percentage of the loan, but the reality is that it's the same amount of effort (generally) to process/UW a larger loan and a smaller balance loan.