All Forum Posts by: Tony Severance

Credit score, max LTV, low loan amount, and low ratio (<1) are the heavy hitters that can drive the rate up on a DSCR very fast.

@Nick Pries There are DSCR loans available down to $50K, but the property needs to appraise for at least $75K.

@Joshua Ricker  The 9.5% rate is VERY high for a conventional loan right now.  However, we do not know the amount being put down, credit scores, etc.  There are probably better options out there that should be explored.  Especially since conventional does not have PPP.  

@Zach Edelman I have seen DSCR lenders that are OK with sellers carrying back a second as long as the CLTV meets their guidelines.

@James Dale DSCR loans are highly dependent on your credit score and the LTV of the loan. Even with a good FICO credit score, if you are buying a property with 20% down, your rate will be higher than the good DSCR rates some people claim to be getting out there. Conventional rates on a SFR investment property with 15% or 20% down are about the same as a DSCR with 25% down, but you will need to pay a bit more in points to get the conventional loan. If your DTI can handle it and you do not feel the absolute need to close in an LLC, the conventional route may be the better route to take due to the lack of pre-payment penalties and slightly less up front expense.

 Thank you for the mention, Jack!!  Always happy to help new investors get started!  Also, our HQ is in Dallas and I am in Fort Worth, so we know the market well.

@Gustavo Rodea  Welcome!  You have come to the right place to learn about these powerful lending solutions that can help you grow your real estate empire!  

@Syreeta McDonald The DSCR lenders do not care how many loans you have. What they do care about is credit score, down payment, DSCR, minimum loan amount, and reserves remaining after the transaction is complete.

@Mike Klarman I have seen min DSCR's of 1.2 on loans with a minimum of $75K. What is the min DSCR on the $70K or $75K loans you mentioned above??

@Sonia Martinez de Simon  Given that you are just starting out and are located in Ohio where home prices are known to be lower than other markets around the country, I am going to assume you will be buying relatively low cost properties.  By this, I mean in the $50k-$75K range.  I only make this assumption based on many clients and other investors I speak to in Ohio on a daily basis.  If this is correct, I recommend you contact either a local bank or local credit union to get pre-approved for your upcoming purchases.  I say this because most national lenders will not be able to finance your purchases due to the resulting loan amounts being lower than their usual minimums of either $75K or $100K. 

Good Luck to you!!

@Patrick Zepeda Most DSCR lenders have a $100K minimum loan amount. However, some will go down to $75K and others will even go down to $55K. Just find a lender who will fund loans at the levels you need. Let me know if you need more info.