DSCR Cash Out Refi >75%
I might be looking for a unicorn.
The standard max with DSCR loans on investments seems to be 75% LTV on a cash-out refi, from the brokers I've spoken with. I have a property that I may be looking to cash-out from in 2-3 months once the rehab is completed (a LTR), and I want as much cash as possible for my next project. Here's what I'm looking for:
- Something in the 85% LTV range on a cash-out refi.
- Doesn't really take into account personal DTI.
So.. that's basically it. Here are factors that don't really concern me:
- Interest rate. I believe standard DSCR loans today are probably in the 7-8% range. If a program with a higher LTV exists and is in the 9-10% range, that would be an acceptable trade off.
- Negative cash flow. I'd be fine with this as I have other sources to make up the difference. I'm not interested in positive cash flow in the short term. I can cash flow a bit negative in the first couple of years (and make it up as I hold the property for 5+ years in eventual increasing rents and appreciation) if it means I can get more cash out now for another project. The only concern about negative cash-flow would be in regards to qualifying (i.e. if a ratio of >= 1.0 is needed, obviously this wouldn't work). I've seen some loans advertising 0.75 ratios, but I haven't explored them yet.
- ARMs. A 5/1 or similar would be fine as that gives me plenty of time to adjust my strategy as necessary. I'm not looking to minimize my payment from a cash-flow perspective, but if an ARM provides for a lower payment and I'd need that to qualify for a particular ratio, this would be acceptable.