All Forum Posts by: Joseph Tubbs

When a DSCR Loan is Not the Right Move

DSCR loans sound amazing... until they aren’t.
They don't care about your W-2, your DTI, or your side hustle. They care about one thing: property cash flow.

But here’s what I’ve seen trip people up:

• High rates (6.5%–8.5%+ currently)
• Often 25–30% down to make it debt-service well enough
• Can be hard to refinance out of if rates stay high

🎯 DSCR is a tool — not a shortcut.
Sometimes a good ol’ 15% down investor loan is better if the numbers still work.

Have you used DSCR recently? What was your rate and experience?

For years, the 1% rule has been gospel in buy-and-hold circles: if a property rents for 1% of the purchase price, it's worth considering. But is this rule helping investors make smarter decisions—or holding them back?

Let’s break it down:

• A $100K property renting for $1,000/month hits the 1% mark, sure.

• But what if that same property has $300/month in maintenance and sits in a stagnant, low-growth area?

• Meanwhile, a $200K property renting for $1,600/month (0.8%) might cash flow similarly—but it’s in a zip code with rising wages, strong schools, and double-digit appreciation over the past 5 years.

I’m not saying throw the 1% rule out entirely. It’s a good gut check. But in today’s market—especially in undervalued Southern metros—it’s often more productive to look beyond monthly rent ratios.

Who here has bought under 1% and still crushed it?

"Success doesn't excite me anymore its just Analysis + Captial + Execution... anyone can do that" -Some tv show

“LLC or No LLC?” – New Investors Get Burned on This

Thinking of putting your first rental in an LLC?
Before you transfer title, here’s what most new investors don’t realize:

• Moving a property into an LLC after closing could trigger your loan’s due-on-sale clause

• Some lenders won't fund your deal if the purchase is in an LLC with no track record

• Insurance rates & coverage may differ when held under an entity

✅ Pro tip: Many investors hold the first few properties personally and layer in umbrella insurance — then set up LLCs as they scale or refinance.

How are you structuring your portfolio? Have you ever had issues transferring title or setting up entities post-close?

 Realtor.com® Investor Report: Investor Share Peaks as Overall Home Sales Hit Decade-Plus Lows by Hannah Jones July 11, 2024

lets throw Alabama in the list. Alabama dosent get the love it deserves in the capital markets 

An unserious answer: leverage up to your ears with OTM REIT call options with zero regard for risk.
An actual answer with some bias: ATL is a highly competitive already stabilized investor real estate market, research some smaller pre-stablized markets (bias incoming) like Birmingham, AL that you can leverage $320k into a dozen SFH's or (more bias incoming) a medium self storage facility on the outskirts of a large market (aim for over 150 units min.)

I don't disagree with you but institutions have access to cheaper capital giving them a larger spread to potentially make profit and ride the appreciation lightening bolt on the long haul.

National institutional investors have begun showing increased interest in Alabama markets, particularly Birmingham and Huntsville, following their saturation in larger Southeastern markets. Data indicates a 35% year-over-year increase in institutional acquisitions, though from a small base representing only 10% of total distressed property transactions. This expanding institutional presence is introducing more sophisticated acquisition criteria, data-driven valuation methodologies, and standardized rehabilitation practices that are gradually professionalizing the market. If current trends continue, institutional market share could reach 20-25% within three years, fundamentally altering competitive dynamics for local operators.

Absolutely, Huntsville has had a huge influx of government and tech jobs since the govt relocated the FBI office. "According to recent CBRE rankings, Huntsville just claimed the #1 spot among emerging tech markets in North America." These areas are forcing appreciation and they're succeeding at an unreal pace.