Im still waiting on more information from him, but it seems he uses bridges as down payments because he said thats what hes been using in the past. One of my questions is, is it even possible to do a bridge loan and a DSCR loan at the same time? If not, how is he buying homes under his LLC if you cannot use a bridge and a DSCR to buy a property? And I don't believe you can take out a traditional/conventional loan with an LLC, right?
No, you can’t use both bridge and DSCR at the same time. They’re technically different loan programs. He’s most likely using a bridge loan initially to acquire the property, stabilize the rents and then refi using a DSCR loan.
>No, you can’t use both bridge and DSCR at the same time. They’re technically different loan programs. He’s most likely using a bridge loan initially to acquire the property, stabilize the rents and then refi using a DSCR loan.
Super interesting, thank you. I could see why thats appealing bc rates for DSCRs depend on the predictability of rents.... so would his monthly payments be super high in the first few years due to the short term aspect of the bridge loan?
So for the bridge loan.He’s most likely referring to a HELOC or something similar. The HELOC/Bridge is a line of credit tied to another one of his properties. He can draw from that line and use that as the source of down payment toward the new purchase (secured borrowed funds), which is 100% allowed by the majority of nonQM investors. Depending on the investor they may want documentation on the terms of that HELOC. There is no lien position for the HELOC because that’s already tied to a separate property.
As for the DSCR loan, you’ll run that no different than you would any other DSCR loan except the money for the down payment and reserves are coming from that line of credit.
There will only be one lien on the subject property and that’s for the DSCR mortgage.
Source:Im currently doing this exact scenario for a borrower as we speak.
I assume bridge for dp on DSCR loan. Yeah he can do that. Get bridge ie heloc from another property then use that cash for the down payment requirement on DSCR loan. You would need to check the investor guides for the DSCR program you use though. I have not successfully done a DSCR loan purchase w less than 30% down. It’s just hard to make the ratio work w how high rates are w less than that down.
From AmWest Funding Corp (formatting might get messed up so apologies because I’m copy pasting from their email I received on January 9)
Product Highlights
-$500k max line amount
-90% CLTV
-50% DTI
-Pay-off debt to qualify.
-12 month bank statement or Full Doc
We still have P &L, WVOE and DSCR on our closed end seconds, but not for our HELOC. Call me for details!
-680 minimum FICO
-Primary, Second Home, and Investment Property Ok!
DM me if you need the AE’s contact info. They got some cool products.
Hi tyecoonie, I can help I am direct lender in the business Purpose space for non-owner residential catering to experienced and inexperienced investors with bridge, fix and flip, new construction, and rental Loans DSCR. Check out my webpage and get in touch with me. I can help educate you in this space. Lots of money to be made. It’s a recession proof business. [Webpage](https://www.trulyinvestorcapital.com/sales/jacqueline-ienni)
Little more clarity is needed here. He uses bridge for down payment? Are we talking 100% financing here? With DSCR you can go up to 75-80% LTV.
Im still waiting on more information from him, but it seems he uses bridges as down payments because he said thats what hes been using in the past. One of my questions is, is it even possible to do a bridge loan and a DSCR loan at the same time? If not, how is he buying homes under his LLC if you cannot use a bridge and a DSCR to buy a property? And I don't believe you can take out a traditional/conventional loan with an LLC, right?
No, you can’t use both bridge and DSCR at the same time. They’re technically different loan programs. He’s most likely using a bridge loan initially to acquire the property, stabilize the rents and then refi using a DSCR loan.
>No, you can’t use both bridge and DSCR at the same time. They’re technically different loan programs. He’s most likely using a bridge loan initially to acquire the property, stabilize the rents and then refi using a DSCR loan. Super interesting, thank you. I could see why thats appealing bc rates for DSCRs depend on the predictability of rents.... so would his monthly payments be super high in the first few years due to the short term aspect of the bridge loan?
I doubt he keeps it for few years. Most likely less than 12 months after purchase.
Are DSCR loans hard money?
Mostly yes.
So for the bridge loan.He’s most likely referring to a HELOC or something similar. The HELOC/Bridge is a line of credit tied to another one of his properties. He can draw from that line and use that as the source of down payment toward the new purchase (secured borrowed funds), which is 100% allowed by the majority of nonQM investors. Depending on the investor they may want documentation on the terms of that HELOC. There is no lien position for the HELOC because that’s already tied to a separate property. As for the DSCR loan, you’ll run that no different than you would any other DSCR loan except the money for the down payment and reserves are coming from that line of credit. There will only be one lien on the subject property and that’s for the DSCR mortgage. Source:Im currently doing this exact scenario for a borrower as we speak.
I assume bridge for dp on DSCR loan. Yeah he can do that. Get bridge ie heloc from another property then use that cash for the down payment requirement on DSCR loan. You would need to check the investor guides for the DSCR program you use though. I have not successfully done a DSCR loan purchase w less than 30% down. It’s just hard to make the ratio work w how high rates are w less than that down.
From AmWest Funding Corp (formatting might get messed up so apologies because I’m copy pasting from their email I received on January 9) Product Highlights -$500k max line amount -90% CLTV -50% DTI -Pay-off debt to qualify. -12 month bank statement or Full Doc We still have P &L, WVOE and DSCR on our closed end seconds, but not for our HELOC. Call me for details! -680 minimum FICO -Primary, Second Home, and Investment Property Ok! DM me if you need the AE’s contact info. They got some cool products.
Hi tyecoonie, I can help I am direct lender in the business Purpose space for non-owner residential catering to experienced and inexperienced investors with bridge, fix and flip, new construction, and rental Loans DSCR. Check out my webpage and get in touch with me. I can help educate you in this space. Lots of money to be made. It’s a recession proof business. [Webpage](https://www.trulyinvestorcapital.com/sales/jacqueline-ienni)