DSCR Loans: The Greatest Investor Loan of All Time?

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Can't qualify for a home loan? Get a DSCR loan! Maxed out on conventional loans? Get a DSCR loan! Want to grow your real estate portfolio faster than ever before? Get a DSCR loan! These investor loans may sound like the holy grail of mortgages, but this is NOT always the case, and if you don't know what you're doing with debt service coverage ratio loans (DSCR), you could face severe consequences.
On this Mortgage Monday, Christian and David review one of the most-hyped, commonly used, and easily misunderstood home loans-the DSCR loan. Most investors think this mortgage allows them to buy UNLIMITED properties without any income to qualify themselves. This is not only incorrect, it's outright dangerous and could lead to getting a higher mortgage rate, worse terms, and significant penalties if you're not SURE that this is the loan for you.
However, for those ready to take their portfolio to the next level and commit themselves to buying steals, not just deals, the DSCR loan could be THE thing that takes your real estate portfolio into the MILLIONS.
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Check Out Another Mortgage Monday Video:
• Mortgage Monday
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DSCR Loans: What Are They And How To Get The Best Terms:
www.biggerpockets.com/blog/ds...
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What Documents Do You Need for a DSCR Loan?
www.biggerpockets.com/blog/wh...
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8 More Commonly Asked Questions and Answers to DSCR Loans:
www.biggerpockets.com/blog/ei...
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00:00 The One Loan to Lend Them All
01:26 What Are DSCR Loans?
03:12 Terms and Penalties
07:30 Mortgage Rates
07:55 Why DSCR Differs A LOT
12:37 DON'T Go Direct
14:57 Connect with Christian and David!

Опубликовано:

12 июл 2024

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Комментарии : 127

@jefferybarnes1423 5 месяцев назад

I did two loans. Cash flow is crazy. 800 plus 1500 on two properties plus I pull 247k.

@_jadetravels 6 дней назад

What state?

@bradynmelser8983 8 месяцев назад

Thank you for explaining this! I’ve been needing another route to keep adding real estate properties while my DTI is maxed out.

@TJ-th9hw 9 месяцев назад

Super great information! Thanks David & Christian.

@IanTuckerCoaching 8 месяцев назад

Great video, DSCR loans are one of the most useful tools for investors that either want to have large portfolios of properties or investors that cant qualify for a conventional loan on an investment property due to their income or debts!

@michaelmansour6326 10 месяцев назад

I will be looking into this product on future deals. Great info. Thank you!

@dwcromartie9280 4 месяца назад

Just the info I was looking for. Tks guys.

@billieerickson2343 10 месяцев назад

Wonderful! I'm new to RE investing. Retired with limited income, so this answers the debt to income question. Thank you.

@itsmebedazzle 10 месяцев назад

You really only need a DSCR loan as an exit strategy from a hard money loan as RE investor. Say you are fix and hold for rental, your income will come from the property.😊

@cjthelender1 9 месяцев назад

@@itsmebedazzle You could also use it as an acquisition loan to acquire property and even keep as a 30 year fixed product.

@itsmebedazzle 9 месяцев назад

@@cjthelender1 I know. I'm a hard-money lender.

@mesturahshittu2386 19 дней назад

Great information, thanks Christian and David

@ediemoll 10 месяцев назад

You guys make me look forward to Monday! Thank you!

@mpc3po 2 месяца назад

Very thorough and dense: incredible info on the DSCR!!

@nicogarcia6711 10 месяцев назад

loved this! I was wondering DSCR loans

@ClarisNdoroRealEstate 10 месяцев назад

Excellent information, thanks!

@DarrellEssexdoubleteam 10 месяцев назад

Dscr is literally the only loan I can do that will allow a 3 month seasoning period as opposed to 6-12. That’s 4 brrrr a year rather than 2 or 1.

@wrt322 10 месяцев назад

But what about the prepayment penalty? Assuming your numbers always workout with that included

@zenlife4736 10 месяцев назад

How has that affected your debt to income ratio?

@MatthewBarchett-qr4nu 6 месяцев назад

What company do you use for the loan?

@mike2959 9 месяцев назад

I’ve gotten a couple of these DSCR loans. First off the loan options and terms is lender specific. 100% lender specific. You can get 15 year. 20 year. 30 year. A interest only for 5 7 10. The options are crazy. Each lender can make their own guidelines. 640 credit 620 680. Reserves were 6 months 3 months. Seen both. I’ve seen so many variations. You guys kinda made it sound like this is all that’s available. I have not found a lender that will go lower than 20% down or lower than a 620 credit score. None required tax returns. All pulled your credit.

@butchgreene 9 месяцев назад

And here we sit without 20% down, a 620 score...and zero properties.

@mike2959 7 месяцев назад

@@butchgreene Who was the lender?

@manleynelson9419 6 месяцев назад

This guy Christian at one broker just did the loan for Mr Green for 15% down

@freedomworks3976 Месяц назад

@@butchgreenewhat is the hang up ??

@DanKohan 10 месяцев назад

DSCR loans seem pretty cool! It's like finding the right tool for the job. But it's important to remember that not all loans fit every situation. Always talk to a loan officer to see if it's the right fit for you. Don't be afraid to ask questions and get the best advice for your specific needs. 😊

@abdulshakurmuhammad2480 10 месяцев назад

Great information

@user-dt8ro2pq9x 3 месяца назад

Great video!!

@neerajchaudhary1821 Месяц назад

GREAT video!

@egorblackroadletoshko5387 10 месяцев назад

Awesome beard Dave!

@freedomworks3976 Месяц назад

Everytime I see Dave with a beard I think 🤔 the wrestler the big show is doing real estate now 😅

@gregorywilliamsjr2763 3 месяца назад

My clients love DSCR loans. In Missouri

@antoniostephano 10 месяцев назад

Great information and helped clarify what is included in the DSCR calculation.Howeve, I think at 7:05 that the mortgage backed securities are considered bonds rather than stocks.

@antonyreid7008 11 дней назад

Good Stuff!!

@faithfamilyrealestate23 Месяц назад

Thank you 😊

@KilleenRealtor 10 месяцев назад

Great episode ! Thank you!

@Colin_17 6 месяцев назад

If I wanted to build a duplex, what loan would you recommend?

@Trapperjohn1000 10 месяцев назад

I’m a builder and real estate investor would love one of these for a triplex or quadplex

@cjthelender1 9 месяцев назад

Not a problem.

@tcfoxdude 3 месяца назад

As a CRE underwriter for a regulated bank, I would caution finding private lenders. There are so many bad actors due to the objectivity of DCR loans and can have very hairy terms.

@marthajean50 2 месяца назад

Cant a decent attorney and a good broker prevent that well enough? I had assumed so...

@SNKR_HEAD83 9 месяцев назад

I own one rental property that's a duplex that generates 5700 a month my mortgage is 1940 with 3500 positive cash flow after maintenance. Can I purchase another property with DSCR? I purchased the property for 499k and put down 250k. I have a balance of 240k.

@brandonlashes 10 месяцев назад

So in other words if you have great credit, and great debt to income ratio it's best to go conventional loan. This is more for those who do not want to furnish income and credit score.

@wakeboarder86 10 месяцев назад

I disagree. All my properties are in LLCs and I want to close at time of closing in my LLC so my name is not on the deed and quit claim. DSCR allows that conv doesn't. Also a lot of times lenders have over lays, and using dscr you can remove the loans out of your debt ratio for primary. Also dscr doesn't have a jumbo limit like conventional. A lot of benefits to go dscr which is why you see a lot of investors with great credit, and great income go dscr vs conv. Seller concessions are 3xs more on dscr then conv too.

@lukehutchins1657 10 месяцев назад

Beautifully explained… I’m looking to get DSCR loans asap. I’m maxed out on number of conventional mortgages. Do you lend in NC?

@cjthelender1 9 месяцев назад

Yup, it's a great route for you.

@nwalker2619 2 месяца назад

Do expenses include HOA fees or just PITI? I have a property that would be 1.13 ratio without the HOA fees but only 0.9 ratio if HOA fees count

@truthsayer9534 10 месяцев назад

Prepayment penalties are designed to keep you in debt and keep interest payments flowing to the bank.

@cjthelender1 9 месяцев назад

In some cases you could actually pay a point at closing to get rid of the prepayment penalty.

@cpoppinz12 8 месяцев назад

Exactly government is its own business.

@bernardbarbour Месяц назад

Nobody keeps me anywhere 😂

@Eager2BFit 2 месяца назад

Will this work on properties with 10+ yr modified mortgage loans?

@dude_man_bro 10 месяцев назад

Love the DnB intro 👾

@user-ch1zs4hm2i 9 месяцев назад

Can you use this dscr loan initially and transfer into a conventional or fha loan

@tiadeese 4 месяца назад

Yes. Conventional for sure.

@compulsiveinvestor 8 месяцев назад

I have several sf rentals in Akron Ohio. Five of them already have dscr 30-year loans serviced by a lender out of Texas. This lender does not have a minimum property value rule. Which is great because Akron properties do not appreciate much, although they have high rent. This lender has temporarily pulled out of Ohio for an undetermined amount of time. So I am looking for a new lender that deals with low value properties. Any ideas? I still have several properties that are owned free and clear. I would like to refi them so that I will have cash to buy more.

@iheartwindshields9770 3 месяца назад

Care to list the name of the company out of Texas?

@BoldasaLionMinistries 9 месяцев назад

Will they allow this for Airbnb Arbitrage model if you want to use a loan to help you buy furniture?

@cjthelender1 9 месяцев назад

You could if you already have the property, have equity in it, and use a DSCR loan as a cashout refi.

@jasonchoi6194 10 месяцев назад

Great video! Is it okay if some of downpayment or reserves are money borrowed from personal loan?

@cominhomewithjohnalan9103 10 месяцев назад

Yes. You can do that.

@cjthelender1 9 месяцев назад

Yes.

@AmezcuaREI 10 месяцев назад

Great info. Are there pre-approvals for DSCR? How do you use this product in a market where homes are only on the market for a day or two?

@cjthelender1 9 месяцев назад

Yes, you can get pre-approved for a DSCR. Just put in an offer within that day or two.

@kennethlazard673 5 месяцев назад

I have an apartment complex that I want to buy in Houston. How can I get with you guys?

@DesMoinesHomeDeals 10 месяцев назад

Does this broker also coordinate private money?

@cjthelender1 9 месяцев назад

Some brokers do, some don't

@wilsonrealty1 10 месяцев назад

Can you refinance into a DSCR loan from a Owner Financed property or is it for new purchases only?

@MattHall83 10 месяцев назад

I’ve never tried that but I wouldn’t see why that would not work given enough seasoning and using a servicing company.

@brennenmoloney4736 10 месяцев назад

DSCR underwriter here. We can do a refinance as long as you own/occupy another primary. We look out for occupancy red flags though. If it appears that you occupy the subject property, we'll deny or counter to an income-based program.

@tylerwright497 9 месяцев назад

@@brennenmoloney4736 why's that?? What if it was a owner occupied 4-plex??

@cjthelender1 9 месяцев назад

Yes, you can.

@allupinu5792 10 месяцев назад

Can you use a DSCR loan for a ADU build?

@cjthelender1 9 месяцев назад

To build the ADU, no. To use on a property that has an existing ADU, yes.

@imaspier3 4 месяца назад

The think is where to apply with who. Mosto of the lender I know are not trustable.

@jonathanf4030 10 месяцев назад

How much liquid do you need in reserves to be approved?

@koby2995 10 месяцев назад

6 months and you can’t touch it

@cjthelender1 9 месяцев назад

Some lenders do not require reserves.

@Shanita162 5 месяцев назад

Hey, how can I get the 20% down for the DSCR Loan?

@FlawlessCFO 2 месяца назад

Equity from your own home. Personal loan. 401k pull. There's lots of ways

@PastorMelquicedec 8 месяцев назад

When ya gona talk about all in one loan

@RoyallKing629 10 месяцев назад

So if I’m getting a dscr loan how much down do I need? And let’s say if I’m doing a flip but I want to keep the house and use a dscr loan. Can I refinance into a dscr loan?

@DavidGreene24 9 месяцев назад

Yes you can. We have a combo of loans to do this-hard money to buy and rehab then refi into DSCR. The BRRRR special.

@RoyallKing629 9 месяцев назад

@@DavidGreene24 ok. What if I wanted to get a fourplex that already was rehabbed and wanted to get a DSCR loan. Is it 20% down? thanks a lot David. You’ve been a lot of help. And I love your videos and information you give!

@cjthelender1 9 месяцев назад

Usually 20-25% down.@@RoyallKing629

@workinman0069 6 месяцев назад

❤

@ednisgarcia448 10 месяцев назад

They forget to mention the high interest rate with dscr

@kayriciawager8778 10 месяцев назад

They discuss rate differences at 7:50

@cjthelender1 9 месяцев назад

Interest is currently 7-9% which is pretty close to conventional nowadays.

@ericprobinson 10 месяцев назад

Does this cover building loans? I have a lot that I want to build a 4plex on and I need a building loan.

@cjthelender1 9 месяцев назад

No it does not, you'll need a new construction loan for that. In my opinion, terms are better. Let me know if you have any questions.

@WallStreetIceCream 10 месяцев назад

But still require 20 % down payment

@koby2995 10 месяцев назад

20% down and 6 months reserves.

@nicsworld82 10 месяцев назад

@@koby29956mo reserves for the property you want to buy or for every property you own?

@imaspier3 4 месяца назад

Any lender in VA?

@biggerpockets 4 месяца назад

You can find investor friendly lenders in your area for free with Lender Finder! biggerpockets.com/findalender

@almateenyazid 5 месяцев назад

Simple!! Man...can you cover the debt?! It's not hard people.

@koby2995 10 месяцев назад

I tried to get a DSCR loan and is more complicated than people think, they need 6 months of reserves and it takes a bit to get approved it's not that easy.

@hamsterbrigade 10 месяцев назад

Was it from a broker or direct?

@koby2995 10 месяцев назад

@@hamsterbrigade a broker, need a decent amount of paperwork and 6 months of reserves that you can’t touch, also 20% down payment.

@MattHall83 10 месяцев назад

There are ways around the 6 months of reserves and not all lenders require 6 months. DSCR are great for a refi from a hard money loan to hold the property.

@tylerwright497 9 месяцев назад

@@MattHall83what are some of the ways??

@cjthelender1 9 месяцев назад

That is not always the case. Reserve requirements will vary by lender. I have some lenders that do not require reserves.

@franklinwill22 5 месяцев назад

Him looking down every 2 seconds is a distraction .

@mcburgerpants 10 месяцев назад

1st

@SignatureJ 10 месяцев назад

Which banks do DSCR loans?

@galaxygolden 10 месяцев назад

I’d rather you reach out to a trusty knowledgeable lender not a bank. It needs a little creativity and guidance to get the right questions answered.

@bonnies4662 2 месяца назад

I’m a Mortgage Loan Originator and we do DSCR loans at Capital Federal. Let’s chat!

@legacyopp9318 10 месяцев назад

I usually enjoy your content but the thumbnails are ridiculous

@Davefitz04 10 месяцев назад

Lmao😂

@dude_man_bro 10 месяцев назад

8th

@mariorichardson1603 10 месяцев назад

Just send a note to The One Brokerage.

@JailAllMAGATS 9 месяцев назад

Wheres your MAGAT gear ?

@skylerdeanimator 10 месяцев назад

Close on my 1st investment property today 🎉🎉🎉🎉 will be documenting my journey @royaltwinsPropertiesllc

@Alexsjusa 8 месяцев назад

How’s the journey going?

@skylerdeanimator 8 месяцев назад

@Alexsjusa thanks for asking. I closed on my second property 2 weeks later and signed lease yesterday for tenant on the second property which is a long term rental.... face book market place is golden i had over 57 inquiries for this property In 5 days . Now im looking around for another property limited supplies on markey.hopefully I could find one before year end. 🙏

@Alexsjusa 8 месяцев назад

@@skylerdeanimator are you documenting your journey on social media?