The difference is that she is receiving a cash flow from the properties that she will plow into additional houses, just like Bob Safe, but she also has a mortgage payment before cash flow that is enhancing her net worth through principal paydown.

Only $4K in principal yet $8.5K in interest.

You will then have a few options with that rent money....you can put it into principal or you can start saving it to purchase yet another property.

So if hit 3 out of 4 - appreciation, principal pay down and tax benefits that was acceptable to me. 

I dont understand why CoC doesnt include the principal part of the mortgage payment.

When the property sells, They get a check at closing for their principal and interest.I ask them if they want to loan their money on another property.

The thing is the real rate was between 9 and 20% a year because of the structure of the loan, whereby the principal would actually increase over time but it wasn't mentioned in their marketing literature.

If you are looking for ways to track/calculate principal and interest payments, you can use loan amortization excel template, plug in the principal amount, loan date, interest rate, and the number of years to pay and it will show you the monthly breakdown/details you need to track the loan.

Underwriting items for DSCR loans include appraisal, credit report, liquidity verification, borrowing entity documents, landlord insurance verification, and whereapplicable lease, verification of rent and security deposit receipt, and property management agreement.DSCR lenders should never ask you for tax returns, W-2 income, pay stubs, or company financial statements.A good DSCR lender can fund your DSCR loan in under 30 days.Pro Number 2: Loan StructureDSCR loans are generally structured as thirty year term, fixed rate and fully amortizing, with LTV up to 80%.To increase cash flow and boost DSCR to qualify for a higher LTV, you can even structure with a five or ten year interest-only period where principal payments are made over the remaining portion of the 30 year term.Most DSCR lenders can fund your loan with DSCR as low as 1.0, though 1.1 is where you will find the best terms.A few DSCR lenders specialize in no and low seasoning cash out refi for rental property investors who use the BRRR strategy.Compare this to traditional banks which generally offer lower LTV, shorter term, higher DSCR requirement, and 6 months of seasoning.Pro Number 3: ReliabilityDSCR loans are a growing component of the multi trillion dollar institutional credit market.While DSCR loan origination volume is growing fast, it struggles to satisfy the demand from institutional investors such as insurance companies, pension funds and credit funds that buy DSCR loans.For this reason, as long as DSCR loan program guidelines for subject property and borrower are met, there is a very high probability that your loan will be fundedwithout delay.Compare this to banks which may subject you to months of underwriting before ultimately rejecting your loan application for reasons unrelated to your application.Con Number 1: Strict GuidelinesThe largest and healthiest part of the DSCR loan industry is 1 to 4 unit residential investment properties in non rural markets where the As Is value and the purchase price is one hundred thousand dollars or higher, and the guarantor's credit score is 680 or higher.If an element of your transaction does not fall within program guidelines, your loan will either be declined or require an exception which can cause delay.DSCR loan program guidelines are constantly evolving to adapt to the demands of borrowers and institutional investors, and to respond to market and risk.A good DSCR lender will knowledgeably and transparently communicate program guidelines, proactively communicate to identify potential issues, and set expectations in a clear and thoughtful manner.Con Number 2: ShenanigansThe DSCR loan industry is fast growing and loosely regulated, attracting loan brokers, private lenders and salesmen who are not knowledgable about program guidelines, not expert in structuring your loan to meet your specific goals, not capable of closing your loan in a timely manner, and not truthful or transparent about loan terms.Con Number 3: Higher interest ratesGiven the demand for DSCR loans from institutional credit investors, the credit spread or risk premium has decreased, making DSCR loan interest rates from the most competitive DSCR lenders nearly the same as bank loans and conventional investment property loans.We should include an asterisk on this con because it is not always true and may not be true in the future.

There are a number of guidelines the IRS has for performing a proper cost segregation study (which will pass in the event of an audit) Here is the link to that list on the IRS website:Cost Segregation Audit Technique Guide - Chapter 4 - Principal Elements of a Quality Cost Segregation Study and ReportI have never seen a DIY before, but I'm sure people do it.Depending on the size and type of your property the fee for engaging a qualified engineer-based firm to conduct the study can be as low as $3,000 (lower in certain cases), and the significant benefit created well outweighs the minimal costs.