All Forum Posts by: Daniel Mendez

Daniel,

Would be happy to connect with you and chat with you about all of your options out there with DSCR financing - Also, you can also check out the BP lender forums for more info - send me PM!

What state are you looking to invest in? Should note that some states are regulatory requirements even for DSCR lenders and some have rules against prepayment penalties which can create some obstacles as well

Hey Daniel! 

Feel free to reach out to discuss, but for now, here are some things to consider in regards to DSCR loans:

-Typically requires 20%+ down 

-May have a prepayment penalty (important to note if you plan to refinance after a short period of time) 

-Income/employment documentation not required 

-Lenders usually want the ratio to fall somewhere between 0.75-1.5, but other qualifications may affect this (credit score, loan amount, etc)  

-Minimum FICO 640-660 usually needed depending on specific program/lender

-minimum loan amount $75k-$100k depending on lender (likely much less of a factor in TX like it is here in OH) 

Hopefully that helps! 

@Daniel Mendez  Where in DFW are you looking?  

 I house hacked for years! It helped save up the money to accelerate traditional RE investing. I now own over 100 units, mostly commercial. When it comes to house hacking don't worry so much about the cash flow. OBVIOUSLY you don't want to be so negative that it kills you, but if you're only a few hundred under your expenses you get a super cheap place to live, like you said. Also, if you buy in a pretty valuable neighborhood you basically get a good asset for low money down that will appreciate well AND cash flow well after you move out (Assuming you live there for a few years). 

Real Estate really is a get rich slow game. Don't forget it. Value appreciation, rent appreciation, and principal paydown are still the MAIN drivers to wealth creation in real estate. 

From what I normally see you probably need about 30% down to cash flow and also pay your 1/4 share of the mortgage.  Obviously there can be exceptions and depends on where your wife wants to live.

I'll guess it is easier to find and qualify on a 2 unit, we don't have many 3s, and your wife probably won't live in a 4 and they seem to be few available.