All Forum Posts by: Pedro Porc

DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760+ generally gets best pricing for investment property loans with most lenders

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals.

Thank you - I'll be in touch in the near future.

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I'm looking to position myself to have maximum purchase power in the future - In essence, I'd like to be able to have lines of credit to be a little real estate fix/flip fix/hold type of person/company.

I have great credit, good income, good numbers on bank-statements and have multiple properties paid off and available for collateral.

What type of loans should I be looking for? Any place you can steer me- to be gin my research.

Greatly appreciated.

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Hey Everyone,

Just would like to ask a couple questions.

The office building that my business is in - is up for sale. It is a 30 room office building. I inquired with the agent and he stated that multiple Non-Profit companies have placed offers on the property. This property is asking for 4mil.

What is the angle on this? Is there special loans only available to Non Profit companies? How do non-profit companies afford buildings such as this? He mentioned that some of the non-profits who placed an offer - he has no idea why...their company doesn't need 30 doors? and they were relatively small niche teams. We were both baffled. There must be some sort of angle people are using non-profit orgs to acquire properties.

2. I'd like to prepare for the next cycle/downturn - I have 2 properties fully paid for and 2 more with a small mortgage. I have perfect credit and good business income/tax returns/bank-statements. I'd like to have enough line to buy several properties. I've noticed some smaller investment/investor companies are able to buy multiple properties at a time because they have relationships with these type of lenders?

My guess is they qualified for some sort of line of credit that enabled them to tap in as they find properties?

What type of loans should I look for? Where should I look?

Thanks in advance!

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Los Angeles County, California

its a REO now...current owner is the bank

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Los Angeles County, California

A house you cosigned for went into foreclosure and then became a REO -

Can a spouse of the previous owner/cosigner make an all cash-offer to the REO Listing?

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Los Angeles County, California

Anyone familiar with purchasing a residential condo through a business or buy it personally and lease it to my business? I have a need for additional office space. I'd rather utilize a small space to use for family members working for me to do the back office work...than rent another office space. Anyone has does something similar? pros and cons? My cpa hasn't responded to me yet...but i know the collective minds here are usually spot on. Thanks in advance.

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All Forum Posts by: Pedro Porc

Pedro Porc has started 4 posts and replied 6 times.

Post: Type of Loans Available

Post: Type of Loans Available

Post: Non-Profit RE Loans & Investor Loan/Line of Credit question

Post: REO - Can previous owner's spouse make an offer?

Post: REO - Can previous owner's spouse make an offer?

Post: Purchase Residential Condo to be used as office space for me