Thoughts on Using DSCR Loans

[Deborah Wodell]

Hi fellow investors,

I've been hearing a lot about DSCR (Debt Service Coverage Ratio) loans lately, especially in the context of long-term buy-and-hold investments. For those of you who've used DSCR loans, I'd love to hear your experiences! Here are a few specific questions I'm curious about:

1. How does the approval process differ from traditional loans? Was it easier to qualify based on the property’s cash flow?
2. What kind of terms have you been able to secure? Are interest rates and loan-to-value (LTV) ratios competitive compared to conventional financing?
3. Have you noticed any challenges or downsides? For example, are lenders stricter about DSCR ratios, or do they require higher reserves?
4. How has using DSCR loans impacted your overall cash flow and ability to scale? Did they allow you to grow your portfolio faster than traditional financing would?

I'm thinking about recommending DSCR loans to some of my clients who are buy-and-hold investors, but I want to make sure I've got the full picture. Would love to hear your insights, tips, or any lender recommendations you've had success with!

Looking forward to learning more from your experiences!