Tag Archive for: easy rental loan

What Makes a DSCR Loan Easy for Investors

Are you looking for a loan that is easy to qualify for with very few requirements? Then we have your solution. We call it the Easy Rental Loan, but other lenders in the industry call it a DSCR loan. A DSCR is also known as a debt service coverage ratio loan, measures your ability to cash flow in order to pay your monthly costs. There are two key items that you need in order to qualify for a DSCR loan. Let’s take a look.

Two key items for the Easy Rental Loan are:

  1. A decent credit score
  2. A lease that covers the monthly cost of your property

The Monthly costs include

  1. Mortgage payment
  2. Property taxes
  3. Insurance
  4. HOA fee

Benefits of the Easy Rental Loan:

If your property positively cash flows, meaning that you make more than you spend on the property, then you can qualify for an easy rental loan. Better yet, you can still qualify for affordable, long term fixed rates with a 30 year fixed term. 

What makes the Easy Rental Loan Easy:

A DSCR loan makes it easy for investors to apply and qualify. You don’t have to worry about submitting tax returns, being in business for two or more years, or having too many financed properties. It really doesn’t get easier than that

Contact us today!

So if you’re looking for a fast, efficient, and easy solution to fund your rental properties, then look no further. We have the easy rental loan waiting for you.

Ready to chat? Great! Our team here at The Cash Flow Company is here to help. We are eager to set you on a path that helps you make the kind of money you need to live the life you want.

Watch our most recent clip to find out more about the Easy Rental Loan.

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The Benefits of a DSCR Loan

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The Benefits of a DSCR Loan

Are you looking for a loan that is easy to qualify for with good rates and a 30 year fixed term? Then we have your solution. We call it the Easy Rental Loan, but other lenders in the industry call it a DSCR loan. A DSCR is also known as a debt service coverage ratio loan, measures your ability to cash flow in order to pay your monthly costs. Before looking at the benefits of a DSCR loan, there are two key items that you need to take into consideration. Let’s take a look.

Two key items for the Easy Rental Loan are:

  1. A decent credit score
  2. A lease that covers the monthly cost of your property

The Monthly costs include

  1. Mortgage payment
  2. Property taxes
  3. Insurance
  4. HOA fee

Benefits of a DSCR Loan:

If your property positively cash flows, meaning that you make more than you spend on the property, then you can qualify for an easy rental loan. Better yet, you can still qualify for affordable, long term fixed rates with a 30 year fixed term. 

What makes the Easy Rental Loan Easy:

You don’t have to worry about submitting tax returns, being in business for two or more years, or having too many financed properties. It really doesn’t get easier than that

Contact us today!

So if you’re looking for a fast, efficient, and easy solution to fund your rental properties, then look no further. We have the easy rental loan waiting for you.

Ready to chat? Great! Our team here at The Cash Flow Company is here to help. We are eager to set you on a path that helps you make the kind of money you need to live the life you want.

Watch our most recent clip to find out more about the Easy Rental Loan.

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How do you know if you’re the right type of person for a DSCR loan on a rental property?

What makes a good DSCR loan? What makes a good DSCR property?

We get hundreds of people asking these questions. While traditional loan offerings will be more or less the same from lender to lender, DSCR loans are more like the wild west. Every lender will have slightly different requirements, expectations, and terms.

But DSCR loans are an amazing option when used in the right place, on the right property, from the right borrower.

Let’s go over 10 things that will help you understand what’s right for a DSCR loan on a rental property.

What’s a DSCR Loan for a Rental Property?

Debt service coverage ratio loans are loans designed for real estate investors. They’re most often 30-year products, but some lenders will offer other types.

The debt ratio in a DSCR loan is based on two things: the property’s income and the property’s expenses (mortgage, interest, taxes, and insurance). Cash flow is a vital piece to DSCR lending.

Let’s look at 10 things to keep in mind for DSCR loans.

1. Income

DSCR loans are best for borrowers whose current income over the last two years doesn’t qualify for either a conventional loan or a loan from a local bank.

If your tax returns are low over the last two years, that’s where a DSCR loan might come in for your rental property.

2. Business History

Many real estate investors are new, so they don’t have two years’ worth of tax returns for their business.

With DSCR loans, the length of your business does not matter. You could have opened the LLC the morning you close on the loan. Banks need your business information because they’re lending based on you. DSCR lenders don’t because they’re lending based on the property.

3. Employment Gaps

In the same vein as the first two items, DSCR loans are great for people who just changed jobs, moved, or haven’t had a continual work history for the past two years.

A conventional bank won’t be understanding about career shifts or gaps in work. But they won’t impact your ability to get a DSCR loan.

4. Investing History

Traditional lenders can be hard on new real estate investors. They want to see past successful projects in order to trust you. DSCR loans, though more designed for investment properties, don’t care about your past real estate investing history.

5. Cash Flow on a DSCR Loan Property

To get a great DSCR loan, the rental property must cash flow. While there are some DSCR loans available for negative cash-flowing properties, you’ll only get the best rates and terms when you have positive cash flow.

6. Loan Limit

DSCR loans are also good for people who have maxed out the amount of conventional loans they can get.

Conventional loans have a limit of 10 per person. Once you’ve reached that limit, you need to start looking for alternative options (like DSCR loans).

7. Credit Score

The higher your credit score, the better. However, even people with lower credit scores (660 and below) have options with DSCR.

Keep in mind, a lower credit score means a more expensive loan. A more expensive loan will lower your cash flow. Lower cash flow might disqualify you for the loan.

Instead of a 7.5% interest rate, a poor credit score could only get you a 9.5%.

8. Holding a Property with a DSCR Loan for 3-5 Years

This is another area where DSCR loans differ from conventional loans: DSCRs come with prepayment penalties. This means if you pay them off before 3 or 5 years (whatever period is decided by the lender), then you get charged a hefty fee.

DSCR loans are best for people who want to hold the property, and not refinance or sell within the prepay period.

9. Property Is Turnkey

DSCR loans aren’t good for fix and flip properties. A DSCR property should need no work – it should be turnkey, totally ready.

This means you should use a DSCR loan on either rental-ready purchases or a refinance on a completely renovated BRRRR-style rental.

10. Interest-Only

Lastly, DSCR loans are good for someone looking for interest-only payments. Banks and conventional loans don’t offer interest-only options.

Doing interest-only improves your cash flow, giving you 5-10 years where you don’t have to pay principal.

The Right DSCR Loan for a Rental Property

When you’re looking for cash flow, always look at all of your options before you jump into a loan.

We hope this article gives you an idea of what you should look for when you shop around.

Download this free DSCR calculator for the next time you’re shopping for rentals, and send any questions our way at Info@TheCashFlowCompany.com.

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How to Get an Easy Rental Loan in 3 Steps

How to Get an Easy Rental Loan in 3 Steps

If you want to close a real estate deal fast and easy, then you need an Easy Rental Loan.

But to take advantage of these loans—and their affordable, long-term fixed rates—you need to study up a little bit with 3 easy questions. If you can answer each one, then you’ll be able to get a loan that’s perfect for you—and your cash flow!

 

Does your rent cover all of your costs?

It’s time to pull out your rental property calculator and add up your costs. These include your mortgage payment, taxes, insurance, and any HOA fees. You should aim to charge a rent that covers these monthly expenses. If it does, then it’ll help lower your rates and obtain higher loan-to-value products.

 Do you have a good credit score?

Sure, you can get an Easy Rental Loan with a score in the low 600’s, but it’ll cost you. Dearly. We’re talking about adding a point or more to your interest rate. That extra cost can suck your cash flow dry by adding another $200 to $400 a month to your payment.

If you need some tips to raise your credit score, check out some of our other videos on our YouTube Channel!

Are you working with a lender who offers many options and programs?

Why is this important? Because every mortgage company has an ideal client, and you want to make sure your real estate lender has an option for you. Something that’ll fit your needs at the lowest cost so you can keep more money in your pocket, pay less at closing, and boost your monthly cash flow.

That’s it! Those are the 3 key questions you need to answer before you dive into an Easy Rental Loan. And if one of them caused you to stumble, no worries. Our team is always here to help.

Happy investing!

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