Rental Property Investor · Houston, TX · Member since 2018 · 73 posts · 22 votes
My first investment property was under my name and so was the mortgage. Everything was easy.
I put my second property under my LLC, with three other partners. We are almost done with renovations and now we are looking for refinancing options but I haven't had much luck.
Where should I be looking? What kind of loan do I need to search for? What kind of lenders do I need to contact?
I would appreciate any information that could help me find a good rate.
Lender · Vienna, VA · Member since 2021 · 61 posts · 33 votes
5y
Marsha,
If your first investment property was under your name, did you get a conventional 30-year fixed rate mortgage? Or did you get a 5-year fixed rate with a 25-year amortization? This will help me answer your question.
Lender · Vienna, VA · Member since 2021 · 61 posts · 33 votes
5y
Marsha,
If your first investment property was under your name, did you get a conventional 30-year fixed rate mortgage? Or did you get a 5-year fixed rate with a 25-year amortization? This will help me answer your question.
DSCR lending would work for those type properties. 30 year fixed is readily available and rates are in the 4's with a couple of points depending on the loan size. You can close either in an LLC or your personal name. With Fannie/Freddie tightening their portfolio percentages, DSCR or asset based lending has exploded.
Lender · Vienna, VA · Member since 2021 · 61 posts · 33 votes
5y
@Stephanie P. I see what you're saying if she's financing on a conventional basis. But if she's financing with a commercial loan, she can actually get a 5-year fixed rate right now in the mid-3% range with a 25-year amortization with appropriate income to service the debt, and if personal credit, liquidity, and net worth are strong. Yes, I've seen lot of brokers. I enjoy the collaboration.
@Stephanie P. I see what you're saying if she's financing on a conventional basis. But if she's financing with a commercial loan, she can actually get a 5-year fixed rate right now in the mid-3% range with a 25-year amortization with appropriate income to service the debt, and if personal credit, liquidity, and net worth are strong. Yes, I've seen lot of brokers. I enjoy the collaboration.
Conventional rates are close to DSCR rates right now; not conventional. No income verification, commercial, 30 year fixed with a loan amount as low as $75,000. Would love to get together with you to see if we can work with your turn downs under 1M.
Debt Service Coverage Ratio. It's the ratio between the mortgage payment and the rents. If the rent covers 100% of the mortgage, the DSCR is 1.0. If a mortgage payment is $1000 per month and the rent is $1200, then the DSCR is considered 1.2 1.2 is considered a decent DSCR for most lenders in this space.