BTR Cash-Out Strategy

[Rogelio Andres Jimenez]

Hello!

What are the key factors to consider when deciding on the most suitable loan type to cash-out refinance a newly completed house? Would a DSCR Loan, Conventional Loan, or Bank Statement Loan be the best choice to maximize returns?

The new build is 100% owned and if I take 75% out I will be getting all my money back. I currently don't have any debts other than an investment property that is cash-flowing and good credit score. I've seen the pros and cons of both DSCR and Bank Statement loans, but don't know which one will be best.

If you've had a similar situation do you mind sharing your experience? 

Thank you 

[Jonathan Taylor]

@Rogelio Andres Jimenez it depends on your situation. Conventional investment property loans usually garner better rates but require tax returns, income/employment verification and DTI calculations. This would be the best option if you are an A paper borrower.

For bank statement/DSCR loans, these are easier to obtain but have higher rates and your loan amount would be limited by the debt coverage ratio. Considering the high rates, 75 LTV is becoming more rare but doable on superb cash flowing properties. Most of the cash out loans I am originating are 70 LTV. This option is better if you do not qualify for conventional.

Hope that helps