Recommendations for DSCR loan for rental property.

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Recommendations for DSCR loan for rental property.

Brandon Gamblin
Saint Louis, MO · Member since 2013 · 108 posts · 19 votes

Can anyone give recommendations for a good lender that does DSCR loans? I have a couple of properties I'm looking to buy so I'm asking for advice and insight on how to deal with these types of loans.

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Daniel ChristopherBusiness Member
Lender · Miami, FL · Member since 2020 · 793 posts · 96 votes
3y

Host Financial is a featured Bigger Pockets Lenders. We just wrote a post on DSCR loans from STRs on Bigger Pockets.

https://www.biggerpockets.com/blog/dscr-loans-the-short-term...

We can fund LTRs as well.

619-815-8867
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  • Jacob Wilhite
    Lender · Sonoma County, CA · Member since 2021 · 28 posts · 9 votes
    3y

    Hey there! I work for One Brokerage, David Greene’s lending team. We do them all day every day. Reach out if I can be of any assistance!

    0Reply
  • Brittany MinocchiBusiness Member
    Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
    3y

    Happy to help! A couple of notes about DSCRs - most lenders have a minimum loan amount of $100k, although some will go down to $75k. If you wanted to blanket multiple properties under one loan, lenders may go a bit lower on the minimums. They have prepayment penalties, something to keep in mind if you plan to refinance sooner than later. Most lenders are requiring 20-25% down depending on credit. Feel free to connect. 

    [email protected]330-354-6590
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  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
    3y
    Quote from @Brandon Gamblin:

    Can anyone give recommendations for a good lender that does DSCR loans? I have a couple of properties I'm looking to buy so I'm asking for advice and insight on how to deal with these types of loans.


    hi Brandon, there’s a lot of good DSCR lenders on BP feel free to utilize the build your team forum. DSCR loans are generally very easy to qualify - happy to help!
    [email protected]860-538-3672
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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
     from @Brandon Gamblin:

    Can anyone give recommendations for a good lender that does DSCR loans? I have a couple of properties I'm looking to buy so I'm asking for advice and insight on how to deal with these types of loans.


     Hey Brandon, 

    What terms are you looking for?

    [email protected]818-269-7983
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  • Abbey Humphreys
    Member since 2023 · 303 posts · 324 votes
    3y

    Hey Brandon- we lend nationwide and we are DSCR loan pros. Would love to connect and chat about your REI goals!

    0Reply
  • Daniel ChristopherBusiness Member
    Lender · Miami, FL · Member since 2020 · 793 posts · 96 votes
    3y

    Host Financial is a featured Bigger Pockets Lenders. We just wrote a post on DSCR loans from STRs on Bigger Pockets.

    https://www.biggerpockets.com/blog/dscr-loans-the-short-term...

    We can fund LTRs as well.

    619-815-8867
    Host Financial51 Review
    WebsiteView Page
    3Reply
  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 500 votes
    3y

    @Brandon Gamblin, I'd be happy to connect. There are lenders that will do 30 year fixed or 40 year fixed terms. 

    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

    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? Is your DSCR ratio greater than 1-meaning are you cash flowing. 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.

    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.

    [email protected]818-770-0340
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  • Jayson Cain
    Lender · Manhattan Beach, CA · Member since 2017 · 423 posts · 268 votes
    3y

    Hi @Brandon Gamblin,

    I'm based in Southern California, but I have started my out-of-state real estate journey in Indianapolis. Now, I have a portfolio of Short Term Rentals and Long Term Rentals.

    I've also helped other investors with their DSCR loans and flip projects. Happy to share my experiences and chat with you more if you're interested.

    0Reply
  • Nazia Edwards
    Virtual Assistant · Honolulu · Member since 2023 · 14 posts · 0 votes
    3y

    Hi Brandon, I represent an investment firm specializing in joint ventures. We have a strong network of lenders offering competitive rates. Let’s connect and discuss further!

    0Reply
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