[Olderguy]

Most hard property money lenders are usually SISA (stated income stated assets) or NoDoc (no income documentation required).

However there are loans known as DSCR which use rental income and get get rates a point or two lower than traditional hard money loans. Right now, they are at 9.5% 30 year fixed and 10% Interest only. Hard money is around 12%.

A DSCR loan is a type of Non-QM (non qualified mortgage) loan for real estate investors. Lenders use a DSCR to help qualify real estate investors for a loan because it can easily determine the borrower’s ability to repay without verifying income.

A DSCR loan is one of several types of home loans referred to as Non-QM loans. Non-QM loans provide potential borrowers with an alternative route to financing, which doesn’t require traditional income verification methods. A DSCR loan in particular makes it easier to show rental income that might not show up on your taxes due to deductions for legitimate business expenses.

A DSCR loan enables real estate investors to get a loan because it takes into account cash flow from investment properties rather than pay stubs or W-2s, which many investors do not typically have. Lenders use DSCR to evaluate a borrower’s ability to make monthly loan payments.

Deductions from properties may lower taxable income, making it hard for investors to prove their true income. Lenders use DSCR to determine whether someone can make loan repayments. Otherwise, many investors might struggle to meet the basic eligibility standards for real estate loans.

Since they don’t require pay stubs or tax returns showing minimum income levels, debt service coverage ratio loans are a great alternative for investors who claim many write-offs and business deductions.

How Does a DSCR Loan Work?

Because real estate investors write off expenses on their properties, some may not qualify for a conventional loan. The debt service coverage ratio loan allows these individuals to qualify more easily because they don’t require proof of income via tax returns or pay stubs that investors either don’t have or that don’t represent their true income due to write-offs and business deductions.

Real estate investors looking for home buying tips should consider a DSCR loan because it’s ideal for properties you intend to rent out or otherwise turn into income-generating properties. From renting to a long-term tenant or operating a short-term rental business on Airbnb, there are many situations where a DSCR loan is a good option, especially if you don’t have W-2 income.

Some of the property types you can use a DSCR loan for include:

Single Family Residences (SFR), including single family homes, condos, and townhomes.
Multifamily properties (1-4 Units).
Many real estate investors tend to use DSCR loans for rental income properties that allow them to open up new revenue streams. If you’re interested in purchasing or building a property and unsure about whether you can use a DSCR loan to do so, reach out to Griffin Funding. We can help you decide whether a DSCR loan is right for you.

Benefits of DSCR Loans for real estate investors include:

Potentially quicker closing times
No income or job history verification required
No limit on the number of properties
Loan amounts up to $5,000,000
Unlimited cash out
As little as 20% on down payments
Credit scores as low as 600
Cashout Refinance up to 75% LTV
DSCRs as low as ​1.0%
Interest-only loan option available
Suited for new and seasoned real estate investors
Both long-term and short-term rentals are eligible (Airbnb, VRBO, etc.)
No reserves required on cash-out loans, 6 months required on all other loans unless the DSCR ratio is less than 1
DSCR LLC loans: Close in the name of your LLC

Reach out for any real estate, hard money questions you may have.

[Bcooper]

Great explanation Steve, you may have horrible tastes in motorcycles but you know your **** when it comes to lending.

[Olderguy]

Great explanation Steve, you may have horrible tastes in motorcycles but you know your **** when it comes to lending.

BTW....DSCR - Debt Service Coverage Ratio...debt service being rental income - taxes, insurance, HOA, mortgage payment, etc....all should be covered to a 1.0 DSCR

Race you for pink slips?

Draggin' knee on the track.jpg

[abfunders]

Here's how to calculate DSCR easily. PITIA/Rent. PITIA = Principle + Interest + Taxes + Insurance + (homeowner/condo) Association fees

[Olderguy]

Here's how to calculate DSCR easily. PITIA/Rent. PITIA = Principle + Interest + Taxes + Insurance + (homeowner/condo) Association fees

Divided by the mortgage payment.

[Bcooper]

BTW....DSCR - Debt Service Coverage Ratio...debt service being rental income - taxes, insurance, HOA, mortgage payment, etc....all should be covered to a 1.0 DSCR

Race you for pink slips?

Draggin' knee on the track.jpg

How about instead we take a ride of more than an hour and see who can walk better after?

[Olderguy]

How about instead we take a ride of more than an hour and see who can walk better after?

You're on....done 500 mile days on that bike...

When the MotoGP races were in Laguna Seca, we rode from Monterey to Yosemite all around and back....7 am to 8 pm....115 degree heat.....didn't pee for three days.

One weekend my buddy and I rode up from Orange county to Monterey.....spent the night listening to music, drank some beers and came back Sunday down highway 1.....great ride.

[Ehenek]

Should I send a screenshot of me riding a bike as well? Mine has a bell and some flare.

[JasonBishop]

You're on....done 500 mile days on that bike...

When the MotoGP races were in Laguna Seca, we rode from Monterey to Yosemite all around and back....7 am to 8 pm....115 degree heat.....didn't pee for three days.

One weekend my buddy and I rode up from Orange county to Monterey.....spent the night listening to music, drank some beers and came back Sunday down highway 1.....great ride.

Circa 1945

old fella.

[Olderguy]

Circa 1945

old fella.

Yeah...think it was 2006 or 2007. I had a generation 1 Kawasaki Ninja ZX-10R.

[Bcooper]

You're on....done 500 mile days on that bike...

When the MotoGP races were in Laguna Seca, we rode from Monterey to Yosemite all around and back....7 am to 8 pm....115 degree heat.....didn't pee for three days.

One weekend my buddy and I rode up from Orange county to Monterey.....spent the night listening to music, drank some beers and came back Sunday down highway 1.....great ride.

Deal Steve, we will have to find the right circumstances as we are located on opposite sides of the country lol

[Olderguy]

Deal Steve, we will have to find the right circumstances as we are located on opposite sides of the country lol

Meet you in the middle....but need canyons to carve....

[Bcooper]

Meet you in the middle....but need canyons to carve....

Sturgis 2024?

[Olderguy]

Sturgis 2024?

No canyons?

[Olderguy]

Sturgis 2024?

Is this you from last year?

368435699_10163013853284418_2635908114197588910_n.jpg

[Bcooper]

Is this you from last year?

368435699_10163013853284418_2635908114197588910_n.jpg

No I don't ride a harley lmfao

[Bcooper]

No canyons?

I mean i have canyons on the way to sturgis

[Olderguy]

Sorry I couldn't resist....maybe not on the west side and a sportbike has room for half a washcloth in storage...

[Bcooper]

Sorry I couldn't resist....maybe not on the west side and a sportbike has room for half a washcloth in storage...

and that's why I like my big comfy cruiser with ample storage space

[Olderguy]

and that's why I like my big comfy cruiser with ample storage space

No argument there...Guess I'll have to move up to a Kawasaki ZX-14R or H2 when I reach 80...

[Bcooper]

No argument there...Guess I'll have to move up to a Kawasaki ZX-14R or H2 when I reach 80...

Not even going to lie steve I'm currently looking at a vmax as a fun weekend bike and doing a bagger conversion. I don't think itd keep up with an h2 for long but itd certainly be fun

[Olderguy]

Not even going to lie steve I'm currently looking at a vmax as a fun weekend bike and doing a bagger conversion. I don't think itd keep up with an h2 for long but itd certainly be fun

V Max - hell of a cruiser..