DSCR Loans: The Shocking Truth About Qualifying Without Income—and Why It Could Make or Break Your Next Investment Deal
Tony:
I don’t know why a Ricky would even have to necessarily use A-D-S-E-R loan to buy, even if it was a turnkey property, there was still other loan options out there that are non DSER. I think to Ashley’s point, the application process is probably simpler and not as in depth. But again, typically higher down payments, typically higher interest rates. So the cost of the debt is more so if you’re looking at the same deal and you can put 15% down loan or you can put a 25% down loan, the cost to acquire that deal is going to be different. If you can get approved, maybe conventionally, the interest rate’s going to be lower versus the DSE loans, so your cash flow is better. So I think it’s really weighing the pros and cons. I think the DSER starts to make a lot of sense when you are really focused on scaling and maybe your traditional banks are worried about DTI because you have so many mortgages going on and you’re not showing enough income yet on your tax returns, whatever it may be. I think that’s when the DS ER has become maybe a little bit more attractive, but it’s a Ricky investor. I would think that there are may be cheaper options out there that you can use in that first deal to really get the most either in terms of cost to acquire the deal or the actual cashflow you get on a monthly basis. So shop around. I think that’s the biggest thing. Just shop around and see which loan product makes the most sense for the deal that you find.
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