DSCR Loans Explained 2023

DSCR Loans Explained 2023Show more

[UPDATED FOR 2023]
In this episode, we will delve into the world of DSCR loans, which are designed specifically for investment properties and can provide a great option for those looking to invest in real estate.

We will discuss the various aspects of DSCR loans, including the lenient LTV ratios, eligibility requirements, and the different property types that are eligible for such loans. We'll also cover details like minimum DSCR, fixed-rate, ARM, and IO ARM options, and gift funds.

We'll wrap up the episode by providing some helpful tips and tricks for finding the right DSCR lender for your investment property needs. So, whether you're a first-time investor or someone looking to cash-out, this episode is for you.

Sit back, relax, and let's dive into the world of investment property loans and DSCR loans in particular.

A little background on what a DSCR loan is:
The formula for the debt-service coverage ratio requires net operating income and the total debt servicing for the entity. Net operating income is a company's revenue minus certain operating expenses (COE), not including taxes and interest payments. It is often considered the equivalent of earnings before interest and tax (EBIT).

This podcast episode titled "DSCR Loans Explained 2023" covers a range of topics related to DSCR loans, including eligibility requirements, property types eligible for the loans, finding the right DCR lenders, advantages of DSCR loans, minimum DSCR, considerations for short-term rentals and lease-up properties, prepayment penalties, buy-down options, bridge financing, and rates for DSCR loans. The podcast also discusses various lenders and programs for short-term rentals and the advantages of DSCR loans for self-employed borrowers. The host emphasizes the importance of lenders reporting to personal credit reports and suggests using bridge loans to refinance into DSCR loans using BRRRR.

Timestamps:

(00:02) Introduction to the podcast episode titled "DSCR Loans Explained 2023"
(00:22) Overview of topics to be discussed including DSCR loans, LTV ratios, eligibility requirements, and the different property types eligible for such loans
(00:43) Helpful tips and tricks for finding the right DCR lenders for your investment property needs
(01:12) Advantages of DSCR loans, including high purchase price percentages and availability for various property types
(02:09) Minimum DSCR and availability for rural properties, as well as considerations for short-term rentals and lease-up properties
(02:25) Prepayment penalties, buy-down options, and bridge financing for rent-ready properties
(02:56) – The option of using STR or corporate rental, and how to get proof of income for refinancing or taking it to a credit union or bank
(03:19) All DSCR lenders are similar but yet different
(03:26) The true business purpose lenders
(03:47) - How DSCR loans are advantageous for investors who may not qualify for DTI loans, and how some investors use Fix and Flip or bridge loans to refinance into a long-term debt
(04:20) - Rates for DSCR loans are not super advantageous at the moment
(04:56) - How to buy properties under market value and use bridge loans to refinance into DSCR loans, using BRRRR
(05:11) - Various lenders and programs for short-term rentals, and assessing individual property needs
(05:43) - Advantages of DSCR loans for self-employed borrowers and the importance of lenders reporting to personal credit reports

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#DSCR #DSCRLoans #DSCRLoansExplained

About Beau: Beau Eckstein is a real estate entrepreneur, TV personality, and commercial mortgage advisor, specializing in construction financing and multi-family lending.

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