Dscr & 203k loan for investment property!!

[Anup Jung Karki]

Hello,

I am looking to purchase a investment property in DFW, Texas with my friend. She bought a house in March/April of 2023 with 20% down payment. So, what are the criteria to get qualified for DSCR loan as well as rehab loan. Our main focus is dscr loan to get it to purchase. Does the down payment have to come from our account or can our family/ friend send money for down payment?

Also, I have a friend looking for VA loan qualifications he's a reserved military. Sorry, I am a newbie if I confused you, will appreciate your guys input.

Thank you.

[Stephanie P.]

Quote from @Anup Jung Karki:

Hello,

I am looking to purchase a investment property in DFW, Texas with my friend. She bought a house in March/April of 2023 with 20% down payment. So, what are the criteria to get qualified for DSCR loan as well as rehab loan. Our main focus is dscr loan to get it to purchase. Does the down payment have to come from our account or can our family/ friend send money for down payment?

Also, I have a friend looking for VA loan qualifications he's a reserved military. Sorry, I am a newbie if I confused you, will appreciate your guys input.

Thank you.

Hey Anup
Welcome to BP!
You have a lot going on here, so I'll try to break it down for you.
If your friend purchased a house in March/April of 2023 with 20% down, I'm assuming that's her primary residence and has nothing (other than the debt she created when she bought it) with the purchase you want to do together.  Now her debt to income ratio is too high and she can't buy anything else; right? No worries, here is the path forward after a couple of clarifications.
DSCR is not a rehab loan.  Far from it.  The property needs to be rent ready to be able to qualify.  Having a vacant property DOES impact the deal, specifically the loan to value.  If the property is vacant, you may get approved, but at a lower loan to value which may not help you.
VA is typically for owner occupied properties.  There are VA investment loans, but it would have to be a multi family property and your friend would have to live there.
If your friend is willing to lend you money, take it and put it in the bank.  Then go and get a hard money loan at 80% for acquisition and 100% of the renovations.  It's the max you'll probably qualify for with your limited experience and that's okay.  If the value of the house is 150K or so, you should have enough cash to acquire the property and float the renovations until the lender gives you a draw.
Then, once the property is stabilized and at least 6 months have passed, refinance into a DSCR loan.  GET PREQUALIFIED FOR THE DSCR LOAN FIRST before you go under contract.  You have to buy the property under market and you have to know you can get away from the hard money BEFORE you sign.
Hope that helps and all the best
Stephanie