Looking for a $100k DSCR cashout on property i own free/clear

[Moises R.]

Hi, my goal is to access the equity in the rental property. It's a duplex. It's paid off. I have it in a separate LLC. I would estimate it's value at 130-160k. I don't want a loan larger than 100k.

Most lenders have a minimum of 150k for their DSCR products. Any suggestions if i want to do a smaller amount? I'm in St Louis, MO. Thank you!

[Shafi Noss]

I've refi'd maybe 40 DSCR cashouts in St. Louis. $100k is totally fine, but leverage may be knocked down for it being a duplex. At $150k it's no problem to hit $100k, lower and it would have to be approved.

[Moises R.]

Quote from @Shafi Noss:

I've refi'd maybe 40 DSCR cashouts in St. Louis. $100k is totally fine, but leverage may be knocked down for it being a duplex. At $150k it's no problem to hit $100k, lower and it would have to be approved.

 Thank you for the response. What are rates looking like lately for something like this? 

[Shafi Noss]

Quote from @Moises R.:

Quote from @Shafi Noss:

I've refi'd maybe 40 DSCR cashouts in St. Louis. $100k is totally fine, but leverage may be knocked down for it being a duplex. At $150k it's no problem to hit $100k, lower and it would have to be approved.

 Thank you for the response. What are rates looking like lately for something like this? 

 6-8%, hard to narrow it without property data

[Devin Peterson]

Quote from @Moises R.:

Hi, my goal is to access the equity in the rental property. It's a duplex. It's paid off. I have it in a separate LLC. I would estimate it's value at 130-160k. I don't want a loan larger than 100k.

Most lenders have a minimum of 150k for their DSCR products. Any suggestions if i want to do a smaller amount? I'm in St Louis, MO. Thank you!

There are many lenders that can provide 100k DSCR loans i recommend speaking with an experienced broker.

[Ko Kashiwagi]

Hi Moises,

There are many lenders that should be able to do this. Reach out to more lenders!

[Chad Davis]

@Moises R. Sent PM

[Erik Estrada]

Quote from @Moises R.:

Hi, my goal is to access the equity in the rental property. It's a duplex. It's paid off. I have it in a separate LLC. I would estimate it's value at 130-160k. I don't want a loan larger than 100k.

Most lenders have a minimum of 150k for their DSCR products. Any suggestions if i want to do a smaller amount? I'm in St Louis, MO. Thank you!

 You can go as low as $55k as long as the property can appraise for 75k or more 

[Robin Simon]

Quote from @Moises R.:

Hi, my goal is to access the equity in the rental property. It's a duplex. It's paid off. I have it in a separate LLC. I would estimate it's value at 130-160k. I don't want a loan larger than 100k.

Most lenders have a minimum of 150k for their DSCR products. Any suggestions if i want to do a smaller amount? I'm in St Louis, MO. Thank you!

I would say there should be a few options at that loan amount - the most common minimum for DSCR lenders right now probably more like $100k or $125k - I would say only a small portion have as high a min. as $150,000

[River Sava]

Hi Moises - As others mentioned, there are options for a 100k DSCR. I am sending you a dm to point you in the right direction.

[Andrew Zamboroski]

Quote from @Moises R.:

Hi, my goal is to access the equity in the rental property. It's a duplex. It's paid off. I have it in a separate LLC. I would estimate it's value at 130-160k. I don't want a loan larger than 100k.

Most lenders have a minimum of 150k for their DSCR products. Any suggestions if i want to do a smaller amount? I'm in St Louis, MO. Thank you!

We go down to a 75k value on 1-4 units if we can help!
www.modernmortgagemi.com/commercial

[Alex Hunt]

If credit, DSCR are good then it should be no problem!

$75k min, happy to connect on this!

[Stacy Raskin]

Some DSCR lenders will go down to a $75K appraised value and a $55K loan amount.

More on DSCR loans- DSCR loans won't use your income to underwrite the loan.

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Happy to connect to discuss further. 

[Jonathan Taylor]

@Moises R. I own a portfolio of properties in Saint Louis so I know that market well. I have lenders with lower amounts and would be happy to run the scenario but at 130k value, you have plenty of options. 

[Matt Quinn]

Quote from @Moises R.:

Hi, my goal is to access the equity in the rental property. It's a duplex. It's paid off. I have it in a separate LLC. I would estimate it's value at 130-160k. I don't want a loan larger than 100k.

Most lenders have a minimum of 150k for their DSCR products. Any suggestions if i want to do a smaller amount? I'm in St Louis, MO. Thank you!

I'm a local lender in St. Louis. We have a DSCR product with a $100k minimum loan amount. The rates are competitive. Would be happy to connect and run the numbers if you're still looking.