Portfolio Loan vs DSCR Loan

[Pete Harper]

I'm looking at financing options for the potential purchase of a 6-unit apartments by my LLC. The property in question is an older 6-unit apartments. The property is fully rented. However, way below market rent. The property is priced right for condition. Our strategy is to fix the property up and raise rents to market rate for long term hold. We have a good track record with this being our 9th similar acquisition. In the past I have used portfolio loans from a local bank. I have a total of four loans with this particular bank, they have been very good to work with in the past. My only issue is the current interest rates. I'm being quoted 8.75% on 30yr fixed, 25% down, no fees. I know rates are up but I wanted to look at other options. Ive heard a lot about DSCR loans and wanted to see if they are a good option. We have cash reserves for renovation so I don't need funds beyond purchase.

Pros and Cons for DSCR loan in this situation.

Thanks, Pete