Do you need to have any REO to apply for a DSCR Loan?

[Matteo Girlando]

Hello gents!

I'm starting my journey into investing in real estate. My idea, together with a partner, is to use the DSCR loans to buy different properties in the midwest.
Talking with a lender he told me its not possible to apply for a DSCR if I don’t already own a piece of real estate..is it true? I’m not finding anything about it, I tough the good credit and good rental mortgage ratio was enough.

that is answer: 

Matteo,

I have one last question. I noticed you do not currently have any REO (real estate owned). For a DSCR loan you must own at least one property (primary residence is OK). If you do not own any REO, unfortunately I will not have a lender that will write a DSCR loan. That is a requirement with the DSCR program regardless of the lender.

If this is true I will probably start buying the first one with a normal conventional and using the DSCR after.

Thanks!

[Joel Rosa]

Quote from @Matthew Crivelli:

@Matteo Girlando

We have a DSCR product available to first time investors. What do you need for a Non-QM DSCR loan? (Rental property)

1. Subject property that can cashflow above the minimum debt service coverage ratio. In our case this is 1.1

2. Subject property needs to be located in a non-rural area and must be close to recent comparable sales 

3. Currently you need GOOD CREDIT (or have a partner who does) - 720+ mid-score is ideal

4. The borrower / partner should have assets to show  (25% down payment + closing costs+ reserves)

5. You will likely need an LLC that will be used to hold the subject property. 

If you can check these boxes off you would be able to start buying long term rentals with having owned zero real-estate prior to the first transaction. 

Hi Mathew,


I am a newbie trying to get my first properties as well and I also currently check all of those boxes. Have you done any deals lending in the Ohio or Pennsylvania markets?