This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.While the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall loss.

More on DSCR loans: DSCR loans won't use your income to underwrite the loan. 

Our issue is income on papers too low to qualify for the an FHA or traditional loan.

Loan Amount 110kCurrents Rents $1,375/moMarket Rents $2100 5 bed 3 bath Happy to look at pricing for you with additional details.cheers!

As an active-duty (soon transitioning) Air Force myself, I know the VA loan is a powerful asset for us.

Question: Should I collateralize the loan (if using private or hard money), or rely on roll-over loans (to maximize the lower points and 3-4% rate)?

I just finished reading The ABCs of Real Estate Investing and ABCs of Buying Rental Property by Ken McElroy.

Quote from @Sri Reddy: We are a team who are venturing in to constructing a multifamily unit from groundup.We don't have any prior experience in construction and are looking for financing loan options.

The Note/Mortgage for each loan states the dollar amount invested & the % of the total loan by name, for each investor. 

Hey @Patrick Braswell  You shouldn't have any issues getting a DSCR loan as long as you have at least 1 borrower who owns 20 to 25% of the property, or if a couple of you can get to that level combined.