New investor financing

[Justin Hanson]

I currently have a house under a mortgage and am having a very difficult time finding a way to finance an investment property. There is no chance we can qualify for conventional in our area as anything over 200k will put us over a .5 debt to income ratio. And here in Oregon most locations start out at 250k for a rehab project and 300k for a low end turn key. 

We have found one private lender who maybe would work for a rehab flip project but charging 1% interst only per month and only financing the house means we have to get creative for financing the rehab. I currently have some equity in our home I could tap into but was planning on using that to cover the required 20% down payment for this lender and that would leave only about half of our equity to work with on financing the rehab. 

Hoping to get some insight on other options I can look into other than waiting another year or 2 to save some money for a bigger down payment for conventional lending. 

[Erik Estrada]

Quote from @Justin Hanson:

I currently have a house under a mortgage and am having a very difficult time finding a way to finance an investment property. There is no chance we can qualify for conventional in our area as anything over 200k will put us over a .5 debt to income ratio. And here in Oregon most locations start out at 250k for a rehab project and 300k for a low end turn key. 

We have found one private lender who maybe would work for a rehab flip project but charging 1% interst only per month and only financing the house means we have to get creative for financing the rehab. I currently have some equity in our home I could tap into but was planning on using that to cover the required 20% down payment for this lender and that would leave only about half of our equity to work with on financing the rehab. 

Hoping to get some insight on other options I can look into other than waiting another year or 2 to save some money for a bigger down payment for conventional lending. 

 Hey Justin,

Sounds like you would benefit from DSCR and hard money financing.

DSCR loans qualify you based on rental income (either market or lease), fico, and downpayment.

Most DSCR lenders do not source or require funds seasoning. You may also use gift funds. The minimum downpayment is 20% for the time being.

If the property needs rehab, you may finance 100% of the rehab and up to 90% of the purchase price on a hard money loan, as long as the total loan amount does not exceed 75% of the ARV.