All Forum Posts by: Kristen L Garner

Hi Rob! I specialize in DSCR and would be happy to discuss with you.

Selecting the right lender is important - you need them to get your loan to the finish line and get you the best terms possible. DSCR requirements do have general similarities but below are some specifics to consider to make sure the lender you select has guidelines that will work for you.

Minimum and maximum DSCR ratio requirements: Generally you want to hit 1 or higher. But some DSCR lenders allow no ratio requirement or give a rate improvement if you exceed 1.25.

Down payment and reserve requirements: Most DSCR loans will require 20% down payment and 6 months reserves. But again, this varies.

Prepayment penalties: Different DSCR loans have different prepayment penalty options and structures. If you have a prepayment penalty you will want to make sure you understand the details of it. Ex: Can you make extra principal payments without triggering it?

Multi-family guidelines: Most DSCR loans are good for 1-4 unit properties. Others allow up to 10 units.

Feel free to reach out if you’d like to discuss further or run some numbers! 

Hi Haniyf, There are DSCR products with guidelines that will accept credit 640 or higher however you will get a hit on max LTV, capping you in the 60-65% range. If you have a partner with higher credit, you can move the property into an LLC with that partner. There are DSCR products that let you use the higher of the LLC member's credit scores. To get max LTV on the cash out, ideally, that partner would have 720+ score.

Hi Brandon, A rehab loan would be a good fit for this scenario. There are many options available but generally speaking they are short term 12-24 month interest only loans. The loan covers 85-90% of the purchase price and 100% of the rehab. Your rehab funds are held back and you take out draws as needed. Once the rehab is done you can refinance into a long term loan or sell. Let me know if you have any questions or would like me to run the numbers on a scenario so you can see what a rehab loan would look like.

Yes, you can purchase a vacant property using a DSCR loan. The lender will go off of the 1007 page in the appraisal for the rental amount to calculate the DSCR ratio. The 1007 page is similar to the page where they calculate the value of the property, but instead they pull comps and data for rental amounts from similar properties in your area. Most lenders will go up to 80% LTV for a DSCR purchase. Some even go up to 85% but the qualifying guidelines are stricter.

As far as the DSCR ratio you will want to hit 1+ to get the max LTV. If you go under 1 you can still get the deal done but you will likely get a hit in LTV or rate. And if your ratio is above 1.25+ you will likely get a better rate. Best of luck and if you want help running some numbers or seeing what rental comps are in your area, let me know!

Most of the investors that I work with that have large portfolios use excel sheets. Here are common columns I see for data. 

Original Loan Amount, Current Loan Amount, Purchase Date, Appraisal Estimate, Rented Y/N, Rental Rate, Annual Insurance, Annual Property Taxes, HOA Dues, Remodel Y/N, Remodel Cost

Hey, welcome! Although I personally invest in Indy...I work with other investors in the Akron area.

A few thoughts -

Rent to retirement vs. finding your own deal:

Turnkey providers like Rent to Retirement can be a great option if you want a more passive, hands-off experience and are okay with potentially lower cash flow. Although you may be paying a premium for convenience...you will likely get a solid deal and spend much less of your own time. 

Finding your own deal may take more time and effort, but it can give you better margins and learning opportunities. If you have someone reliable on the ground (agent, PM, mentor), that can make this path smoother. 

What I’ve seen work well in Akron for other investors I work with:

I've seen scalable success in B-class areas with solid tenant demand and lower turnover.

Avoiding properties that “look cheap but need everything.” 

Paying attention to property taxes and school districts. They can impact both cash flow and tenant quality.

Making sure you understand property management costs in the area. Even if you don’t need one now, plan for one later if you scale.

If you want a second set of eyes on a deal, I’m happy to help!

Red Flags:

• No online presence: If you can’t Google them and find a website, reviews, or even a LinkedIn page, be cautious. Reputable lenders should be easy to verify.

• Vague loan terms: Make sure the interest rate, fees, points, and loan duration are clearly outlined up front. I've had borrowers miss payments and ruin their credit simply because they weren't clear on the terms of their HML.

• No clear payoff process: Ask how you’ll obtain a payoff demand when you’re ready to exit the loan. I’ve seen borrowers get stuck or delayed in the refi stage when this isn’t clear from the start.

Green Flags:

• Transparency: The best lenders are upfront about costs, timelines, and risks.

• Flexibility: Some lenders will work with unique property types or creative deal structures, especially helpful if you’re eyeing an apartment complex.

• Experience: Look for lenders who have worked with investors in your market and property type. You can even ask for examples.

• Speed and reliability: One of the main benefits of hard money is speed. Make sure they can actually close fast and deliver what they promise.

Best of luck!

Hi there! I invest in Indianapolis from out of state...and as someone originally from the area, it’s been both familiar and eye-opening. When I first started, my biggest challenge was selecting the right property. I learned quickly that a low purchase price and high projected cash flow can be misleading, especially if the property is in poor condition or in the wrong neighborhood. Over time, I refined my buying criteria to focus on long-term value, not just short-term numbers.

I now work with many other out-of-state investors in Indiana, and the ones who thrive usually have strong boots on the ground—whether that’s a mentor, property manager, agent, etc. That insight makes all the difference in choosing the right deals.

Of your current options I would say Cincinnati wins for cash flow! In general there are many areas and pockets in the market that fit the bill - more than I could list and depends on what type of property and price point you are looking at. 

Hey Sarah!

Starting locally can be a smart move, especially if you already have a realtor, contractors, and contacts in place. That existing team gives you a major head start, especially with a short-term rental or flip. Elmhurst and surrounding suburbs may not be STR "hotspots," but executive rentals or medium-term stays (like traveling nurses or corporate housing) can still cash flow well.

Out-of-state investing can offer different opportunities and higher ROI, but it also adds layers of complexity (property managers, distance, unfamiliar laws), and for a first deal, staying local might let you learn with more control and less stress.

I started my portfolio by investing out of state in Indiana (originally my hometown) . I chose to do so because the area I lived in at the time didn't have numbers that made sense for me and I felt familiar with Indiana and still had connections there.  I am very hands off with my properties and let me PMs handle almost everything. 

From a lending perspective, I work with both STR and flip investors and there are great loan options available whether you're staying put or going out-of-state (DSCR, non-QM, bridge loans, etc.). Timing bonus depreciation could be worth watching, but the right deal will still perform either way. Your strong W2 income will also help you snatch conventional loan pricing and better rates to get you started - always a plus!

Happy to run numbers if you’d like to compare different strategies or properties. Best of luck.