Quote from @Ismael Ayala Jr.:
Quote from @Brayden Hrycko:
Hey @Ruben Ramirez,
Lenders are looking for a few things. They want to see decent credit and proof of assets. I have done plenty of DSCR deals with clients with no landlord experience. They will hit you on the interest rate and LTV. You're generally looking at 20-25% down on the purchase. I am doing DSCR deals on the regular so yes it is still possible in today's market.
Hello Brayden,
This may be a dumb question so forgive me for asking; I feel a little embarrassed to be honest. But whatever, you got to put yourself out there and not be afraid to ask questions and admit your limitations. I'm new to real estate(just started renting out my rental property last fall). I understand real estate to be capital intensive. However, I'm looking at creative ways to produce cash flow with little to no cash down. The question is:
I have >$100,000 of equity in my (1st SFH) rental property. I currently live in my primary residence (2nd SFH). Will a DSCR lender give me a home equity loan from my (1st SFH) rental property, so that I can cover the down payment + closing costs to assume the 2.75% interest rate on a (3rd SFH) property I would move into immediately? As I would have to move in at least for a year to assume that rate. I would then just rent out my current (2nd SFH). The goal would be to capture that interest rate and keep it for the next 25 years so that I can cash flow well, if I move again and rent it out.
Hello @Ismael Ayala Jr.,
There are lenders that will offer home equity loans as well as cash out refinances (run the numbers to see what makes more sense).
However, home equity loans will work off your debt to income ratio while DSCR cash out refinances won't look at your income. They will only look at how the property is performing.
Going back to your question- Yes, you can pull equity out of your investment property so you can re-invest into other assets. This will be based on their own parameters of how much they can loan compared to the value of your property. Just because you have $100k in equity doesn't mean they will lend you $100k. For example, cash out refinances you're typically looking at a max of 75-80% of the properties value.
I would be happy to discuss more with you!
