Refi a DSCR purchase

[Rachel Hurst]

Hey all need advice on which way to go on this. I have 3 STR's currently which account for all of my income besides some small projects I take on the side. I was a flipper and spec builder up until about a year ago when I decided to pivot to spend more time with my aging parents and my children.

So here's the scenario. One STR is a unit connected to my primary which I already have a Heloc on with about 50% out at any given time.

The other 2 properties were both purchased in January with 20% down DSCR loans. I forced equity in both. One has about $110k -$130k in equity (located in TN), dependent on appraisal. The other has well over $200k in equity bc this was a killer deal (located in FL).

I need to pull money out of one or the other of these to get cash for a DP and rehab on the next property. My hang up is the refi. I went into both thinking I'd BRRR but then of course interest rates skyrocketed. Even with investment loans on both I have interest rates of 4.5%.

Do I proceed with trying to find a DSCR lender to refi one or both knowing I will pay up to 3% higher interest rate? Both will still cash flow just not as well but if I don't continue to scale I'll be forced to take a flip or 2 a year to keep things moving and I really am done with that at this point.

Anyone have any other ideas? Maybe a portfolio loan of investment HELOC? This is uncharted territory for me so looking for advice from more seasoned investors.

[Zach Wain]

Its a tough pill to swallow, but if you want to continue to add properties that is the only realistic way. Cash out on a DSCR loan will likely be 4% or more compared to what you are paying now. DO you have pre payment penalties on any of your current DSCR loans? If you do not know, find that out ASAP as that could make the decision for you.