DSCR Loan Help

[Kelly Stanton]

We purchased a property that we rehabbed in the last 3 months and are looking to refinance to get out of our 10.5% hard money loan. The property was purchased through a LLC so a conventional loan isn't an option for us. We have landed on DSCR as our best refi option but are finding that the majority of DSCR lenders require 12 months of rental history which we don't have. For context, we have been running a successful airbnb for 6+ months cash flowing close to $750/month. Does anyone know of a lender in TX that has more loose rental terms?

[Devin Peterson]

Do you have 12 months of mortgage history overall? (e.g., have you owned a primary residence for at least 12 months?) There are plenty of other options out there without 12-month seasoning requirements.

[Robin Simon]

Quote from @Kelly Stanton:

We purchased a property that we rehabbed in the last 3 months and are looking to refinance to get out of our 10.5% hard money loan. The property was purchased through a LLC so a conventional loan isn't an option for us. We have landed on DSCR as our best refi option but are finding that the majority of DSCR lenders require 12 months of rental history which we don't have. For context, we have been running a successful airbnb for 6+ months cash flowing close to $750/month. Does anyone know of a lender in TX that has more loose rental terms?

Yes - you should be able to find a lender that is "AirBnBRRRR" friendly - most DSCR Lenders will require the full 12 months of STR history but a few that specialize in STR can qualify less than one year, typically with AirDNA projections or some common-sense mixed underwriting approach

[Zach Edelman]

You should be able to refinance with a DSCR loan with a lender that utilizes AirDNA projections. You will be able to convert your current debt to a 30 year perm debt loan and cashflow on a long-term basis.

[Tanner Lewis]

It looks like this STR will be eligible for refinancing. If you don't have a full year of booking history, you can often combine booking history (six months in this case) and AirDNA projections. With the booking history, the lender will just be looking to see if you are on track to meet the AirDNA projected revenue for the year.

[Kelly Stanton]

Quote from @Devin Peterson:

Do you have 12 months of mortgage history overall? (e.g., have you owned a primary residence for at least 12 months?) There are plenty of other options out there without 12-month seasoning requirements.

Hey Devin, yes I've owned my primary for about 6 years. Would the two other partners also need to have 12 months of mortgage history? 

[Kelly Stanton]

Quote from @Robin Simon:

Quote from @Kelly Stanton:

We purchased a property that we rehabbed in the last 3 months and are looking to refinance to get out of our 10.5% hard money loan. The property was purchased through a LLC so a conventional loan isn't an option for us. We have landed on DSCR as our best refi option but are finding that the majority of DSCR lenders require 12 months of rental history which we don't have. For context, we have been running a successful airbnb for 6+ months cash flowing close to $750/month. Does anyone know of a lender in TX that has more loose rental terms?

Yes - you should be able to find a lender that is "AirBnBRRRR" friendly - most DSCR Lenders will require the full 12 months of STR history but a few that specialize in STR can qualify less than one year, typically with AirDNA projections or some common-sense mixed underwriting approach

Robin, if we found something like the above would we be able to convert the property to a MTR or LTR if we wanted to?

[Devin Peterson]

Quote from @Kelly Stanton:

Quote from @Devin Peterson:

Do you have 12 months of mortgage history overall? (e.g., have you owned a primary residence for at least 12 months?) There are plenty of other options out there without 12-month seasoning requirements.

Hey Devin, yes I've owned my primary for about 6 years. Would the two other partners also need to have 12 months of mortgage history? 

 No not at all! You have lots of options here!

[Robin Simon]

Quote from @Kelly Stanton:

Quote from @Robin Simon:

Quote from @Kelly Stanton:

We purchased a property that we rehabbed in the last 3 months and are looking to refinance to get out of our 10.5% hard money loan. The property was purchased through a LLC so a conventional loan isn't an option for us. We have landed on DSCR as our best refi option but are finding that the majority of DSCR lenders require 12 months of rental history which we don't have. For context, we have been running a successful airbnb for 6+ months cash flowing close to $750/month. Does anyone know of a lender in TX that has more loose rental terms?

Yes - you should be able to find a lender that is "AirBnBRRRR" friendly - most DSCR Lenders will require the full 12 months of STR history but a few that specialize in STR can qualify less than one year, typically with AirDNA projections or some common-sense mixed underwriting approach

Robin, if we found something like the above would we be able to convert the property to a MTR or LTR if we wanted to?

Yes, that wouldn't be a problem at all post-close. I actually am a huge fan of the hybrid MTR/STR strategy here in Austin

[David Pearl]

Quote from @Kelly Stanton:

We purchased a property that we rehabbed in the last 3 months and are looking to refinance to get out of our 10.5% hard money loan. The property was purchased through a LLC so a conventional loan isn't an option for us. We have landed on DSCR as our best refi option but are finding that the majority of DSCR lenders require 12 months of rental history which we don't have. For context, we have been running a successful airbnb for 6+ months cash flowing close to $750/month. Does anyone know of a lender in TX that has more loose rental terms?

@Kelly Stanton - Hi Kelly. Like others have said, you dont necessarily need 12 months STR history. AirDna projections can be used. I own AirBnB's myself, and have executed the AirBnBRRRR strategy. Happy to discuss how we can help.

[Cassidy Corella]

@Kelly Stanton Hi! I do DSCR loans all the time. You do not need 12 months of history. Some lenders will allow for the use of AirDNA, others will not. More importantly you need a lender who allows for short term seasoning for pulling out appriased value. I use a lender that oonly requires one day of seasoning so that I can refi as soon as the rehab is completed into a long term, fully amortizing loan.

[Kelly Stanton]

Quote from @Cassidy Corella:

@Kelly Stanton Hi! I do DSCR loans all the time. You do not need 12 months of history. Some lenders will allow for the use of AirDNA, others will not. More importantly you need a lender who allows for short term seasoning for pulling out appriased value. I use a lender that oonly requires one day of seasoning so that I can refi as soon as the rehab is completed into a long term, fully amortizing loan.

Cassidy, are you seeing competitive rates with this type of loan? 

[Cassidy Corella]

Quote from @Kelly Stanton:

Quote from @Cassidy Corella:

@Kelly Stanton Hi! I do DSCR loans all the time. You do not need 12 months of history. Some lenders will allow for the use of AirDNA, others will not. More importantly you need a lender who allows for short term seasoning for pulling out appriased value. I use a lender that oonly requires one day of seasoning so that I can refi as soon as the rehab is completed into a long term, fully amortizing loan.

Cassidy, are you seeing competitive rates with this type of loan? 

Nearly as good as investor conventional since Fannie and Freddie did all of their loan level pricing adjustments a few year back.  Just did one at 7.125%.  Also, I was able to roll fees into the loan amount.

[Colin McMahon]

Hey @Kelly Stanton,

Like Cassidy rightfully mentioned, you should look for lenders that are flexible with rental history requirements and use AirDNA data for short-term rentals like your Airbnb. Additionally, find lenders who offer short-term seasoning options, which allow refinancing shortly after rehab completion.

I'd be happy to assist! Feel free to DM me for more specific recommendations or to discuss your options in detail.

[Erik Estrada]

Quote from @Kelly Stanton:

We purchased a property that we rehabbed in the last 3 months and are looking to refinance to get out of our 10.5% hard money loan. The property was purchased through a LLC so a conventional loan isn't an option for us. We have landed on DSCR as our best refi option but are finding that the majority of DSCR lenders require 12 months of rental history which we don't have. For context, we have been running a successful airbnb for 6+ months cash flowing close to $750/month. Does anyone know of a lender in TX that has more loose rental terms?

 Hi Kelly, 

Yes, you can refinance using the projected AirDNA rents. Lenders will use up to 80% of the projected rents to qualify. You may also use the actual rent if you have previous experience with another property. 

[Deborah Wodell]

Hey! If you still need options, I can possibly help.