All Forum Posts by: Zachary Vanison

Not sure those books will get into the TX specifics, like lock types required, how to handle a security deposit, safe harbor when charging late fees, required lease disclosures, etc.  I can't think of a TX-specific book or site off the top of my head at the moment.  I usually reach out to my network if I have questions.

Not the most exciting read, but you could check out the Texas Property Code for Residential Tenancies:  https://statutes.capitol.texas.gov/Docs/PR/htm/PR.92.htm

And understanding your lease in detail will go a long way to helping you as well - most new landlords really don't.

Or if you have the time, find some landlord networking groups in your area.  There are a few groups that post here or on Meetup.com.

Andy

@Zachary Vanison, we do DSCR loans for new investors.

Some more information on DSCR loans:

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 as it doesn't consider borrower income or borrower debt to income (DTI) ratios. The loans we work on have a minimum $100,000 loan amount.

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. Are you cash flowing the property? Is your DSCR ratio greater than 1-meaning are you cash flowing. 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.

4. Length of prepayment penalty- Generally prepayment penalties run from 1-5 years. The longer the prepayment penalty term the less of an impact on the rate.

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 = $1875Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23

Generally lenders will let you vest the title in your name or an LLC name.Are