All Forum Posts by: Scott Wolf

@Scott Wolf understood. I think I will need my investment partner to be the guarantor but I still provide half the money down. Promissory note between us until I buy a personal property, then move investment into LLC after

@Scott Wolf and on top of that, do you know any DSCR lenders that could guarantee it wouldn't show up on my personal credit?

We own outright a two unit property in Chicago under a LLC.

We want to get some equity out and invest in another real estate project.

Can someone recommend a lender specializing in DSCR loans? I have done internet searches and the options I have found are not very appealing.

Thanks in advance

Hey BP community,

We've been scaling a rent-to-own single-family housing model across the Midwest and Southeast and have run into a wall with traditional DSCR lenders.

We've been working with small local banks and credit unions to finance deals, but as we grow, we're looking for more scalable lending partners. We've tried groups like Lima One and Kiavi, but they just don't work for our model — their DSCR underwriting is based on market rents, not actual lease terms, and STR want 12 month's of existing performance.

Here’s an example deal:

• Purchase Price: $400,000

• Lease Terms: 3-year lease at $4,000/month

• Market Rent: ~$2,500/month

Because DSCR lenders are using the lower market rent, we get capped on LTV and lose the leverage we need — even though our tenant-buyer is pre-approved, fully underwritten, and putting down 10%.

We operate two private real estate funds and close 2–4 single-family homes/month for pre-approved rent-to-own tenants. Each home is appraised, inspected, and fully underwritten with long-term lease commitments — and we’re looking for a strategic debt partner (bank, private lender, or broker) who can underwrite based on actual lease terms or use no-ratio underwriting.

Anyone have recommendations for lenders or brokers who specialize in no-ratio or flexible DSCR products?

I’d love to connect and happy to share more deal info if helpful.

Thanks in advance!

Looking for funding options on a $1.42 million SFH in Glendale, AZ, that will be used as a STR.

Hi everyone, thanks in advance for the replies

I'm beginning to look into multifamily property and I'm a newbie.  So simple question (hopefully):

Should I talk with a lender now before I have any properties on the table or wait until later in the process?  I don't want to waste anyone's time, but I don't want to miss an opportunity because I'm not prepared.  

Thanks

@Brian Cauldwell Brian, if I have a DSCR loan on a rental in an LLC, is that going to affect my DTI on a personal mortgage later?

During the pandemic, I bought a 3-unit house hack on the north side of Chicago for $580k with a 10% down portfolio loan through a local credit union. I renovated it, moved out, and it's since been a great investment, now cash flowing significantly with a 3.625% 30 yr FRM. Earlier this week, I got an email from the credit union holding the loan with an unexpected offer. They are willing to allow me to cash out refinance the property with a 30 yr FRM at 5% at up to 90% LTV. A recent comp sold that leads me to believe a reasonable valuation for the property of $800k. My loan balance is about $485k. These terms sound almost too good to be true, the catch being that I need to replace my rate with one nearly 140 bps higher (which is still significantly below market).

Were I to refinance at 90% LTV, my cash flow would evaporate entirely, and I might be slightly cash flow negative until next year when I can raise my below-market tenants’ rents to market, at which point I’ll be modestly cash flow positive again. But at the same time, I will have $235k tax-free in my bank account to put towards another deal which I intend to be cash flow positive. That same amount of money would probably take 10 years to earn via cash flow, and even then I’d have to pay tax on it.

What are the risks of taking this offer and leveraging up again? 140 bps interest rate increase doesn't seem all that bad. I know home values have been softening across the country, thankfully Chicago still seems to be going strong (at least for right now). Should interest rates drop below 5% for conventional mortgages, I know I can't refinance down if my LTV is too low, but other than that? Thanks.

Hey bigger pockets people. I am currently getting denied on a DSCR loan due to the appraisal using long term rental comps. I am the buyers agent and the only financials we have from the seller/airbnb, although look fantastic, do not have the property address on the airbnb financial. It just has the LLC that the seller has it registered under.

Anyone use a DSCR loan and pulled financials from airbnb before? If so, what documents helped underwriting?