All Forum Posts by: Jay Hurst

you bet. You have to show a lease and get what is called a market rental schedule in the appraisal. Most programs will use the lessor of those two to establish the rent. As long as your total payment is lower then the rent you are ok. 

what are the rates on the properties right now? Their is still some pretty cheap money available for investors using the DSCR loans while vesting in your LLC.

You can use a Debt Service Coverage Ratio (DSCR) loan to pull cash out of the other property. DSCR loans only look at the rental income the property is bringing in, not the rest of your income. You would then likely have to purchase using a DSCR loan as well if you income the additional debt.

15% down on a DSCR purchase is available.

This is actually a common question I get as I work with a lot of investors. They will ask if a loan will show up on their credit report or not. The answer is that it does not matter because assuming the loan is personally guaranteed it still has to be disclosed. And that should be ok, because if you are buying the property correctly the hit against the DTI should be small if any, or you just use a DSCR loans that does not factor in the DTI anyway. But, always disclose ALL loans.

why can you not use your short term rental income to qualify? I assume it is on your tax returns correct?  If it is on your tax return you can use it for a conventional loan. 

 They are called Debt service coverage ratio loan. The only income that is taken into account is the subject rental income. 

assuming 740 or higher credit score, 30 or 45 day rate lock, escrow account and just assuming 750k purchase price  and based on Friday's closing pricing you could do a bit better, but it is not a terrible offer. 

 The "rate" on any conventional loan is based on a number of factors including obvious ones including the occupancy, loan to value, credit score, property type but even less obvious ones as loan size, rate lock period, if you are ok with an escrow account or not, total lender fees (yes, "points" are an obvious one but I seen fee sheets with 6 500 dollars charges with creative names that were not origination or discount points but added up in total costs as the same thing so who cares what it is called.  So, this might not be much help but it is hard to say if something is fair or good pricing without knowing all the details.