Latest / Own More Doors / #40 DSCR Loans Are a Game Changer for Real Estate Investors!

Transcript

#40 DSCR Loans Are a Game Changer for Real Estate Investors! · Own More Doors

• 0:00
  SPEAKER_00: What's up everyone?
• 0:00
  SPEAKER_00: Juan Weezar here with the Own More Doors podcast.
• 0:03
  SPEAKER_00: This specific episode was first shared on our YouTube channel, Sage Real Estate.
• 0:08
  SPEAKER_00: Check it out.
• 0:08
  SPEAKER_00: And we're excited to bring it to you here.
• 0:11
  SPEAKER_00: We hope you enjoy the interview.
• 0:13
  SPEAKER_00: If you're an investor and you're looking at getting an investment loan, I really want you to watch this video.
• 0:17
  SPEAKER_00: We're gonna be talking about DSER loans.
• 0:19
  SPEAKER_00: There's four reasons why you should consider this.
• 0:21
  SPEAKER_00: One, it's 15% down, which is much lower than your typical um down payment.
• 0:27
  SPEAKER_00: 40-year loans is an option for those.
• 0:30
  SPEAKER_00: Interest only is an option for the first 10 years, and no PMI.
• 0:34
  SPEAKER_00: What's the catch?
• 0:35
  SPEAKER_00: Tune in today, learn all about it.
• 0:37
  SPEAKER_00: DSER loans.
• 0:38
  SPEAKER_00: I'm here with Phoebe Todoroff.
• 0:40
  SPEAKER_00: Hey everyone, I'm OneWeezar.
• 0:42
  SPEAKER_01: And I'm Phoebe Todoroff with Sage Trust Mortgage.
• 0:44
  SPEAKER_00: Today we're gonna be talking about DSCR loans.
• 0:47
  SPEAKER_00: And so we're just gonna hop right into it.
• 0:48
  SPEAKER_00: Phoebe, like everywhere I'm hearing investors, buyers, everyone's asking, um, hey, does that qualify for a DSCR loan?
• 0:58
  SPEAKER_00: Or I want a DSCR loan?
• 0:59
  SPEAKER_00: And and and we're um towards the end of March 2025.
• 1:03
  SPEAKER_00: Let's let's let's rehash what is a DSCR loan?
• 1:08
  SPEAKER_00: Why is it important?
• 1:09
  SPEAKER_00: Why why is it popular right now?
• 1:12
  SPEAKER_01: Uh it's very popular right now.
• 1:14
  SPEAKER_01: A DSCR loan is for investment property only, and it uses the rents solely for that property to qualify for the mortgage.
• 1:26
  SPEAKER_01: Um, it does require, you know, good to excellent credit.
• 1:32
  SPEAKER_01: It requires a minimum of 15% down payment.
• 1:36
  SPEAKER_01: You can be a first-time investor, so you don't have to have experience.
• 1:40
  SPEAKER_01: And some of the programs don't even require reserves, like the traditional investment loan requires reserves.
• 1:47
  SPEAKER_00: Phoebe, would you would you say that the DSCR is kind of a non-traditional program?
• 1:51
  SPEAKER_01: Oh, it's for sure a non-traditional program.
• 1:53
  SPEAKER_01: For sure.
• 1:54
  SPEAKER_01: Okay.
• 1:54
  SPEAKER_01: For sure.
• 1:54
  SPEAKER_01: It it's it's what we call a non-qualified mortgage, meaning your income is not used to qualify for the loan.
• 2:04
  SPEAKER_01: It's strictly based on the income that the property produces, and it's different than a commercial loan.
• 2:10
  SPEAKER_00: Um Well, you know what I like that you just said is so it's for investment property.
• 2:16
  SPEAKER_00: Correct.
• 2:17
  SPEAKER_00: That's that's what we sell.
• 2:19
  SPEAKER_00: And but like, so if someone calls me and says, hey, I want to buy my first fourplex on my K.
• 2:24
  SPEAKER_00: Are you planning on living out in it?
• 2:25
  SPEAKER_00: And if they say no, I'm like, okay, we we definitely need 25%.
• 2:29
  SPEAKER_00: I'm gonna say we definitely need 25% down.
• 2:32
  SPEAKER_01: Right.
• 2:32
  SPEAKER_00: But because I'm thinking of the conventional way.
• 2:35
  SPEAKER_00: This is the this is the traditional way.
• 2:37
  SPEAKER_00: And so today's video is the non-traditional way, which actually allows you to come in with way less money down.
• 2:44
  SPEAKER_00: When you're an investor, and I give you the option to put 15% down and 25% down, 15% is is where you should go.
• 2:50
  SPEAKER_00: So if you were buying a million dollar fourplex, 25% is$250,000 versus$150,000.
• 2:57
  SPEAKER_00: Well, yeah, you would rather put it.
• 2:59
  SPEAKER_00: It's a big difference.
• 2:59
  SPEAKER_00: It's a big difference when you're an investor in most cases.
• 3:02
  SPEAKER_00: Not everyone's gonna agree, but in most cases, when you're getting started, um, you want to borrow as much as possible.
• 3:07
  SPEAKER_00: Of course.
• 3:08
  SPEAKER_00: And so that would be one reason why I would go there.
• 3:10
  SPEAKER_00: So um, what type of investors are loving this?
• 3:15
  SPEAKER_00: Because so you said you said you don't need to show your income.
• 3:18
  SPEAKER_00: Correct.
• 3:19
  SPEAKER_00: Okay, so like who doesn't want to show their income?
• 3:22
  SPEAKER_01: You know, so a lot of um self-employed individuals who do not report a lot of their income are key borrowers for the DSCR loans.
• 3:33
  SPEAKER_01: Um investors that own multiple properties and maybe don't claim all of the income from the other properties or do not claim enough, those are also, you know, key people for those types of DSCR loans.
• 3:46
  SPEAKER_01: But typically most of the DSCR loans we do are for people who either have seasonal income that's not consistent, or um they are self-employed, or if you have, you know, wealthy individuals who are willing to give you the down payment, you don't even need to have a job to qualify for a DSCR loan.
• 4:08
  SPEAKER_01: You just need to have good credit.
• 4:10
  SPEAKER_00: Okay.
• 4:12
  SPEAKER_00: Not every property is gonna qualify.
• 4:14
  SPEAKER_00: And I I guess my question is, you know, obviously we we help a lot of people buy fourplexes, but we also help much larger buildings, you know, 18 unit buildings, 10 unit buildings, 12 unit buildings.
• 4:24
  SPEAKER_00: Is there like a sweet spot, Phoebe, that you would say, like, hey, four is too little, or is four enough, or hey, you want it's for the bigger stuff?
• 4:32
  SPEAKER_01: No, so the DSCR loans, most of them, um, the sweet spot's gonna be two to four units.
• 4:36
  SPEAKER_01: They do have a separate program for five to eight units, but I don't have anything available for properties that are greater than eight units.
• 4:45
  SPEAKER_01: Okay.
• 4:46
  SPEAKER_01: Um, and the five to eight units is gonna require the 25% down payment.
• 4:50
  SPEAKER_01: However, in the if the building qualifies based on the rents, you still don't need to have a job and you just need to uh have the down payment, and that's gonna have a reserve requirement of six months of the entire payment in in a reserve account or a bank account, checking savings, investment, stocks.
• 5:10
  SPEAKER_00: Phoebe, we've we've covered DC uh DSCR loans in the past.
• 5:14
  SPEAKER_00: Okay.
• 5:15
  SPEAKER_00: Why are they growing in popularity right now?
• 5:19
  SPEAKER_00: Like what's the driver behind that?
• 5:21
  SPEAKER_01: The driver behind that, the interest rates have significantly improved on the DSCR.
• 5:25
  SPEAKER_01: Give us an example.
• 5:26
  SPEAKER_00: Give us an example of where they're at going.
• 5:28
  SPEAKER_01: Well, I just closed one, for instance, two weeks ago.
• 5:31
  SPEAKER_01: Uh three unit building, San Pedro.
• 5:34
  SPEAKER_01: They the the clients did have a large down payment because they did a 1031 tax exchange.
• 5:40
  SPEAKER_01: Okay.
• 5:40
  SPEAKER_01: Um, the reason why they had to go DSTR is because one of the borrowers has um inconsistent income and at this time was not working.
• 5:50
  SPEAKER_01: So we went the DSTR route and they ended up putting down 35%.
• 5:55
  SPEAKER_00: Although they didn't have to, but they didn't.
• 5:57
  SPEAKER_01: Right.
• 5:58
  SPEAKER_01: They did because they did an exchange, right?
• 6:00
  SPEAKER_01: So they they needed to move all of their money over, and their interest rate was 7.125% on a 30-year fixed mortgage investment property with no prepayment penalty.
• 6:13
  SPEAKER_00: Okay.
• 6:14
  SPEAKER_00: So so that answers that the the other question is that there some people might be watching this thinking, okay, what's the catch?
• 6:20
  SPEAKER_00: Is it is it that it's a temporary loan, but it's not a temporary loan.
• 6:23
  SPEAKER_00: No, it doesn't have to be.
• 6:24
  SPEAKER_00: It's a 30-year fixed loan.
• 6:25
  SPEAKER_01: Correct, correct.
• 6:26
  SPEAKER_00: Which is great.
• 6:27
  SPEAKER_01: And so they also offer 40-year fixed, and they also the DSCR also gives interest-only options as well.
• 6:34
  SPEAKER_00: So let's someone watching may not know what's okay, if 30-year, a 40 year, like I don't like why does it matter?
• 6:42
  SPEAKER_00: Can you tell us why that matters?
• 6:44
  SPEAKER_01: So a 40-year fixed mortgage is going to be amortized over 40 years, so it's going to have a lower payment.
• 6:48
  SPEAKER_00: Which is great.
• 6:49
  SPEAKER_01: Right, is super great.
• 6:50
  SPEAKER_00: Which is what you want.
• 6:51
  SPEAKER_00: Sign up for that one.
• 6:53
  SPEAKER_00: Right?
• 6:53
  SPEAKER_01: But the lower the payment, the more property you can buy because of the rents covering the payment, right?
• 6:58
  SPEAKER_01: Yeah.
• 6:58
  SPEAKER_01: And then number two, they have a 30-year fixed with a 10-year interest only option.
• 7:03
  SPEAKER_01: So for the first 10 years of the mortgage, um, it's interest-only payments, and then it becomes a 20-year mortgage, fully amortized.
• 7:11
  SPEAKER_01: And the 40-year mortgage you can do fully amortized for 40 years.
• 7:15
  SPEAKER_00: I wonder why this person in San Pedro, for anyone watching, I wonder why they they went 30 year, not 40 years.
• 7:19
  SPEAKER_00: Because that would lower the Right.
• 7:21
  SPEAKER_01: Yeah.
• 7:21
  SPEAKER_01: I agree.
• 7:22
  SPEAKER_01: Well, there's an explanation behind that, but that it was a personal reason of theirs.
• 7:27
  SPEAKER_01: But then the 40-year you can do a 10-year interest only, and then it becomes a 30-year fully amortized loan.
• 7:33
  SPEAKER_00: Okay.
• 7:34
  SPEAKER_00: If that was above a lot of people's head, uh, just a couple things.
• 7:38
  SPEAKER_00: Okay.
• 7:39
  SPEAKER_00: Your traditional bank is not going to give you anything more than 30 years.
• 7:43
  SPEAKER_00: Okay.
• 7:44
  SPEAKER_00: So lowering the payment in a state like California, right, where our values are much higher than than than other states, I would recommend.
• 7:54
  SPEAKER_00: Okay, so that's going to lower your pri your thing.
• 7:57
  SPEAKER_00: Um, if there's an interest-only option, uh, it's even better.
• 8:01
  SPEAKER_00: It's it's even better because now what you're doing.
• 8:04
  SPEAKER_00: So we've already lowered your payment with the 40-year, and now if we're not paying anything towards the principal for the first 10 years, the payment's very little.
• 8:12
  SPEAKER_00: Why does that matter?
• 8:13
  SPEAKER_00: Because in most cases, when we sell a building, the rents are just not high enough yet.
• 8:18
  SPEAKER_00: Right.
• 8:19
  SPEAKER_00: Okay.
• 8:19
  SPEAKER_00: And we have to little by little, through time, through the proper methods, try to get those rents up.
• 8:26
  SPEAKER_00: And while you're navigating those waters, you want to have the payment that's as low as possible.
• 8:31
  SPEAKER_00: That would be one strategy.
• 8:32
  SPEAKER_00: I'm not saying for everybody.
• 8:33
  SPEAKER_00: Someone might be watching and saying, aha, I'm a cash buyer.
• 8:36
  SPEAKER_00: I don't need that.
• 8:37
  SPEAKER_00: True, you don't need that.
• 8:38
  SPEAKER_00: But for most of our clients, they're gonna need it.
• 8:40
  SPEAKER_00: And I I like the interest only for 10 years.
• 8:43
  SPEAKER_00: That gives us a lot of protection.
• 8:44
  SPEAKER_00: It does.
• 8:44
  SPEAKER_00: And I love the 40 years.
• 8:46
  SPEAKER_00: So you got me sold on those two reasons and the 15% down.
• 8:49
  SPEAKER_01: Yes.
• 8:50
  SPEAKER_00: Okay.
• 8:51
  SPEAKER_00: So what's the catch?
• 8:52
  SPEAKER_00: Phoebe, there it can't be this good.
• 8:54
  SPEAKER_00: What's the catch?
• 8:55
  SPEAKER_00: Is the interest rate higher?
• 8:56
  SPEAKER_00: Like so.
• 8:57
  SPEAKER_01: Yeah, so it's the interest rate, depending on which loan program you go with, uh, what type of property you're purchasing, and where your credit score is, those are the three things that are gonna dictate your interest rate.
• 9:09
  SPEAKER_01: And the interest rates on those properties, because they are based solely on the income the building or the property produces, the interest rate is going to be higher.
• 9:18
  SPEAKER_01: And it's going to be anywhere between, you know, three-eighths of a point higher than a regular conventional loan, up to two percent higher again, depending on the factors of your respective deal for the property that you're purchasing.
• 9:34
  SPEAKER_00: So, okay, so the catch, everything's gonna have a catch.
• 9:37
  SPEAKER_00: So the catch is that the interest rate is gonna be slightly higher.
• 9:40
  SPEAKER_01: Correct.
• 9:40
  SPEAKER_00: But it's not astronomically higher.
• 9:42
  SPEAKER_00: Not astronomically higher.
• 9:43
  SPEAKER_00: It's just slightly higher.
• 9:45
  SPEAKER_00: But in my opinion, the difference in in the increased interest rate is offset by the three other components that we just talked about.
• 9:53
  SPEAKER_01: Correct.
• 9:54
  SPEAKER_01: And then there's also the option to add in a prepayment penalty.
• 9:58
  SPEAKER_01: So the longer the prepayment penalty you agree to, the lower your interest rate can be.
• 10:03
  SPEAKER_01: So those are something that you can agree to and obtain a lower interest rate.
• 10:09
  SPEAKER_01: However, you know, they typically start at five years, and then there's obviously four-year, three-year, two-year, one-year options.
• 10:16
  SPEAKER_01: And each, um, the longer the prepayment penalty, the better your interest rate's gonna be.
• 10:21
  SPEAKER_00: So let's talk about because everything, uh, everything you're talking about is is based off of the the income that's being produced by the asset, or or is it the income that the appraiser tells me that I should be producing?
• 10:33
  SPEAKER_00: Like, like how are they gonna do that?
• 10:34
  SPEAKER_01: That's a great question.
• 10:35
  SPEAKER_01: So the it's going to be if the units are vacant.
• 10:39
  SPEAKER_00: Okay.
• 10:40
  SPEAKER_00: In some cases.
• 10:41
  SPEAKER_01: So some cases, if any of the units are vacant, they're going to go by what the appraiser states the market rent is.
• 10:47
  SPEAKER_00: Okay.
• 10:48
  SPEAKER_01: Okay.
• 10:48
  SPEAKER_01: If the units are occupied, they're going to use the actual income based on the lease agreements or rental documents that are provided to prove the income being received.
• 11:00
  SPEAKER_00: Okay.
• 11:00
  SPEAKER_00: And so let's let's try to simplify the process.
• 11:03
  SPEAKER_00: So someone's watching this and they're like, okay, it it guys, it's checking all the boxes.
• 11:08
  SPEAKER_00: Like uh, I'm gonna call you on Monday.
• 11:10
  SPEAKER_00: Okay, yes, call us on Monday.
• 11:11
  SPEAKER_00: But um, how can someone say, well, because this is gonna be, this is not like you as an individual qualify for a DSER loan and across every property.
• 11:22
  SPEAKER_00: Like, I want you, if you're watching this, know that this is property specific.
• 11:26
  SPEAKER_00: What's that mean?
• 11:27
  SPEAKER_00: Oh, what's the property cost?
• 11:29
  SPEAKER_00: What's what's the price, and what's the income?
• 11:32
  SPEAKER_00: And so what's the ratio that we're trying to meet here?
• 11:34
  SPEAKER_01: Um typically, so the the the best interest rate, the best terms of the loan are gonna be um one percent.
• 11:42
  SPEAKER_01: So meaning.
• 11:43
  SPEAKER_00: Or I'm saying, like, what's the debt coverage?
• 11:45
  SPEAKER_00: Like, are we trying to get to 1.2?
• 11:46
  SPEAKER_01: No, one percent.
• 11:47
  SPEAKER_00: Oh, which is even easier.
• 11:48
  SPEAKER_01: Correct, which is even easier, and I actually have options that go all the way down to 0.75%.
• 11:53
  SPEAKER_00: Can can you kind of give us an example?
• 11:55
  SPEAKER_00: Like when you're saying 1%, so someone, so someone at home, like kind of could figure that out in their mind, like, like what are they talking about?
• 12:02
  SPEAKER_01: Okay, so let's just make it simple.
• 12:04
  SPEAKER_01: Um, let's just throw a number out there.
• 12:06
  SPEAKER_01: Say your mortgage payment, including insurance and taxes, is$5,000.
• 12:10
  unknown: Okay.
• 12:11
  SPEAKER_01: The rental income on that property needs to be$5,000 or more per month.
• 12:18
  SPEAKER_01: Either actual, what it's currently producing, or if it's vacant, then whatever the appraiser determines the market rent is.
• 12:26
  SPEAKER_01: So it needs to be equal.
• 12:28
  SPEAKER_00: So, so it's possible.
• 12:30
  SPEAKER_00: So it's it's it's kind okay.
• 12:32
  SPEAKER_00: Someone could call me and say, Does that property want qualify for the deck uh for for the for the DSCR type loan?
• 12:39
  SPEAKER_00: And if some of the units are vacant, it's gonna be, it depends.
• 12:43
  SPEAKER_00: I mean, it there's really not a this is not black and white.
• 12:46
  SPEAKER_00: This is like, I hope I could qualify under the DSCR.
• 12:50
  SPEAKER_00: I mean, that's kind of what we're doing in a way.
• 12:52
  SPEAKER_00: Yes.
• 12:52
  SPEAKER_00: Okay.
• 12:52
  SPEAKER_01: And there's always the opportunity to obviously do a larger down payment to make up the difference if the rents are not quite at the level they need to be at.
• 13:01
  SPEAKER_00: So what Phoebe's saying is we if you have the resources, if you have more than the 15%.
• 13:07
  SPEAKER_00: All right, so you have the$150,000 on a million dollar acquisition, you actually have$250,000.
• 13:14
  SPEAKER_00: Okay, but you would rather put less.
• 13:15
  SPEAKER_00: I don't blame you.
• 13:16
  SPEAKER_00: I would do the same.
• 13:17
  SPEAKER_00: And you're hoping that we meet the the 1% debt coverage ratio.
• 13:22
  SPEAKER_00: Correct.
• 13:23
  SPEAKER_00: And that example, so just let's go back to the example.
• 13:26
  SPEAKER_00: Your total cost based on the interest rate, and you might want to know what the interest rate's gonna be.
• 13:31
  SPEAKER_00: If someone's playing around with some numbers at home, can can we go off the 7.125?
• 13:36
  SPEAKER_00: Or was that a little sweeter?
• 13:37
  SPEAKER_01: That was a little sweeter because they had a much larger down payment.
• 13:39
  SPEAKER_00: All right, so let's be conservative.
• 13:40
  SPEAKER_00: Like seven, seven what?
• 13:42
  SPEAKER_01: I would say probably in the range of seven and a half to seven and three quarters.
• 13:48
  SPEAKER_00: Okay.
• 13:48
  SPEAKER_00: All right, so let's be conservative, okay?
• 13:51
  SPEAKER_00: Let's not uh let's not lie to ourselves.
• 13:52
  SPEAKER_00: Okay, let's use this as an interest rate now.
• 13:55
  SPEAKER_00: And you could use this on any property.
• 13:57
  SPEAKER_00: And what we're saying is when we're saying payment, Phoebe, we're saying um, well, it could actually be interest only, too.
• 14:04
  SPEAKER_00: It can because it's yes, okay, which at that's another part.
• 14:07
  SPEAKER_00: But we're adding taxes and insurance and everything.
• 14:09
  SPEAKER_01: That's it.
• 14:10
  SPEAKER_01: Just just and just the the annual premium for your insurance, the annual taxes based on the sales price, not current, right?
• 14:18
  SPEAKER_01: Right.
• 14:19
  SPEAKER_01: And the the new principal and interest payment or interest only payment.
• 14:23
  SPEAKER_00: Got it.
• 14:24
  SPEAKER_00: We have a calculator on our website.
• 14:26
  SPEAKER_00: You could go to go to our website, and we actually have a lot of calculators, but one of them will will tell you what your payments are gonna be.
• 14:33
  SPEAKER_00: Just just use 7.7.5 or 7.75.
• 14:37
  SPEAKER_00: Okay, just use those numbers for now.
• 14:39
  SPEAKER_00: And um, and you could you could you could look at it and say, hey, that that property qualifies, that one doesn't.
• 14:46
  SPEAKER_00: Correct.
• 14:46
  SPEAKER_00: Right?
• 14:47
  SPEAKER_00: Correct.
• 14:47
  SPEAKER_00: Now, where it's gonna be a little vague if you're if you're doing this stuff at home is if there's vacant units.
• 14:53
  SPEAKER_00: So you're looking at a four-unit building, two are vacant, which is nice, but you don't know where the appraiser is gonna come in.
• 14:58
  SPEAKER_00: And by the way, there's no telling what the appraiser is gonna say.
• 15:03
  SPEAKER_00: That they're either gonna be realistic of what the rents could be, they could be maybe not as thorough.
• 15:09
  SPEAKER_00: I'm gonna call it a little lazy, um, average, and maybe beat up the value.
• 15:14
  SPEAKER_00: And and where we go into it thinking like this is a slam dunk, the appraiser is gonna give us these values, they may not.
• 15:20
  SPEAKER_01: Correct.
• 15:21
  SPEAKER_00: And on all of a sudden, then you might have to come in with more money down.
• 15:24
  SPEAKER_00: Correct.
• 15:24
  SPEAKER_01: That's a possibility.
• 15:25
  SPEAKER_00: Let me give you guys another example on why this is important.
• 15:30
  SPEAKER_00: If you were looking to buy a five-unit building, their debt coverage ratio is 1.2.
• 15:36
  SPEAKER_00: What does that mean?
• 15:37
  SPEAKER_00: That that means that that they're more they're being way more lenient on on the DSCR loan than they would be on a traditional commercial loan, which is huge.
• 15:47
  SPEAKER_00: Uh, because that debt coverage ratio means they're gonna want you to come in with more income than what the true expense is, and so that's an important thing.
• 15:55
  SPEAKER_00: Um what else does someone at home need to know about the DSCR loan?
• 16:01
  SPEAKER_00: Because right now I'm sold on it.
• 16:04
  SPEAKER_01: Other than, I mean, the main factor is that it has to be an investment property.
• 16:08
  SPEAKER_01: Uh, if you want to move into it, you can.
• 16:11
  SPEAKER_01: However, it needs to be purchased as an investment property.
• 16:14
  SPEAKER_01: Um, they they allow gifts for down payment, okay, um, which is great.
• 16:19
  SPEAKER_01: So you can get a gift from family member, employer, you know, partner, business associate, um, someone you have a relationship with, you can get a gift from.
• 16:28
  SPEAKER_01: But it's a great program if you call, you know, if the property qualifies for it and you have the down payment.
• 16:34
  SPEAKER_01: It's a great program.
• 16:35
  SPEAKER_01: And you don't have to have a job.
• 16:38
  SPEAKER_00: Guys, I are you hearing this?
• 16:40
  SPEAKER_00: So, okay, a couple things.
• 16:41
  SPEAKER_00: A couple things.
• 16:44
  SPEAKER_00: Phoebe, through through Sage Trust Mortgage, you could do this loan?
• 16:47
  SPEAKER_01: Yes.
• 16:47
  SPEAKER_01: Yes.
• 16:48
  SPEAKER_00: Okay.
• 16:48
  SPEAKER_00: And you've done a lot of these loans.
• 16:49
  SPEAKER_01: Yes.
• 16:50
  SPEAKER_00: Okay.
• 16:50
  SPEAKER_00: And it sounds like you're really familiar, and and so this is a loan product.
• 16:54
  SPEAKER_00: Um, would would you say that some lenders may not be familiar with it?
• 16:58
  SPEAKER_01: Um, the traditional conventional lenders are starting to offer these types of programs.
• 17:05
  SPEAKER_01: However, um, there is a multitude of lenders that are doing these non-qualified mortgages.
• 17:13
  SPEAKER_01: Um, and they're every bank and every investor has different guidelines and different opportunities.
• 17:20
  SPEAKER_01: Um, and you know, they're they're getting better and better as time goes on.
• 17:25
  SPEAKER_01: These loans are improving, meaning less down payment, better interest rates, better terms.
• 17:32
  SPEAKER_01: Um, you know, a year ago these interest rates were in the 8%, right?
• 17:36
  SPEAKER_01: Even close to nine.
• 17:38
  SPEAKER_01: So they weren't so enticing.
• 17:40
  SPEAKER_01: And you know, a year ago, they most of them were requiring a minimum of 20% down.
• 17:45
  SPEAKER_01: So they're reducing the amount of down payment, they're improving the interest rates.
• 17:48
  SPEAKER_01: Um, they've also provided that 0.75%, which means you know, less income is needed to qualify from the building.
• 17:56
  SPEAKER_01: So that's a great opportunity.
• 17:59
  SPEAKER_01: And you know, they're just they're getting easier to do.
• 18:04
  SPEAKER_01: It for lack of a better word.
• 18:06
  SPEAKER_01: I don't um got it.
• 18:07
  SPEAKER_01: They used to be very difficult when they were first coming around.
• 18:10
  SPEAKER_01: There was a lot of rules, regulations, conditions, and now it's basically if the building qualifies and you have decent credit and you're ready to go and you have the down payment, you know it's it's it's pretty much a done deal.
• 18:24
  SPEAKER_00: We're s we're selling the four-unit building on Atlantic.
• 18:27
  SPEAKER_00: We're in this case, so this is rare, all four units are vacant.
• 18:32
  SPEAKER_00: That buyer is getting a DSER loan on that property.
• 18:35
  SPEAKER_01: Okay.
• 18:35
  SPEAKER_00: Okay, so it's a very popular program.
• 18:38
  SPEAKER_00: Um, two things.
• 18:41
  SPEAKER_00: The first one is we haven't talked about mortgage insurance.
• 18:44
  SPEAKER_00: Right.
• 18:44
  SPEAKER_00: Okay.
• 18:44
  SPEAKER_00: Is it needed?
• 18:45
  SPEAKER_00: No.
• 18:46
  SPEAKER_00: No mortgage insurance.
• 18:47
  SPEAKER_01: There is no mortgage insurance on non-qualified mortgages.
• 18:50
  SPEAKER_00: Okay, no.
• 18:51
  SPEAKER_00: All right, so add that to the plus column, okay, because that list keeps growing.
• 18:54
  SPEAKER_01: Yep.
• 18:56
  SPEAKER_00: Someone's watching this video and they say, I have great income, I have great credit, I I know I qualify through the conventional route.
• 19:08
  SPEAKER_00: Should that person who qualifies for the conventional route also maybe look at the DSCR?
• 19:13
  SPEAKER_00: Or is it like you you only look at DSCR because you're self-employed and you're not if somehow you don't qualify?
• 19:20
  SPEAKER_00: But I mean, or the should the conventional person look at this as well, is what I'm saying.
• 19:26
  SPEAKER_01: I mean, it it would not hurt to look at the terms of the loan being offered because they could put less money down.
• 19:32
  SPEAKER_01: So that you know, the traditional conventional loan is gonna require 25% down, hands down.
• 19:37
  SPEAKER_01: Um, you know, there's there's no flexibility in that number.
• 19:40
  SPEAKER_01: So um if that person buying it, even though they were qualified, wanted the DSCR loan, um, they could get a quote and see if it works better, because then they would have less of a down payment.
• 19:55
  SPEAKER_01: That that would really be the only difference, would be the reduced amount of down payment.
• 19:59
  SPEAKER_01: So then possibly they could buy two buildings, they could split up their money and put 50% down on one and 15% down on another.
• 20:07
  SPEAKER_00: That's that's that's that's the right idea.
• 20:09
  SPEAKER_00: That's why you would do that.
• 20:11
  SPEAKER_00: Okay.
• 20:12
  SPEAKER_00: Um I'm gonna give you the final word regarding DSCR.
• 20:15
  SPEAKER_00: Is there anything else that they should that they should be thinking about with a specific loan?
• 20:20
  SPEAKER_01: No.
• 20:21
  SPEAKER_01: Perfect.
• 20:21
  SPEAKER_00: Phoebe, what's the best way to contact you?
• 20:24
  SPEAKER_01: Um you can email me, Phoebe at SageRE Group.com.
• 20:28
  SPEAKER_01: You can uh call me up, you can send a text, the phone numbers are on the website.
• 20:33
  SPEAKER_01: Um, whatever way works best for you.
• 20:36
  SPEAKER_01: I'm available all of those ways.
• 20:39
  SPEAKER_00: Perfect.
• 20:40
  SPEAKER_00: Um, you could do loans in all of California.
• 20:43
  SPEAKER_01: Like Yes, so all of California, I can do any type of loan.
• 20:47
  SPEAKER_01: And what's great about the DSCR loans and the non-qualified mortgage loans, that about 40% of the states allow me to do loans outside of California because they don't require a specific lending license in that state to do those types of loans.
• 21:03
  SPEAKER_01: So that's another great option if you are looking to buy out-of-state investment property.
• 21:08
  SPEAKER_00: Um is Texas one of those?
• 21:11
  SPEAKER_00: Just because I know a lot of people are going to Texas from California, is that one where you can maybe do a DSCR loan?
• 21:16
  SPEAKER_01: I need to check.
• 21:16
  SPEAKER_01: So it wasn't before, but I know that they've been updating the states allowing them.
• 21:20
  SPEAKER_01: Texas has very strict lending guidelines compared to a lot of the the states.
• 21:25
  SPEAKER_01: Um, and I would need to check and see.
• 21:27
  SPEAKER_00: What is a a state where you see um, you know, either they, you know, they they have a lot of multifamily stock where you know you could definitely do it there?
• 21:37
  SPEAKER_01: Um, so Florida is one of them.
• 21:39
  SPEAKER_00: Okay.
• 21:40
  SPEAKER_01: Um, some of the southern states are allowing it.
• 21:42
  SPEAKER_01: Um, I can do not Arizona is not one of them.
• 21:46
  SPEAKER_01: Okay.
• 21:46
  SPEAKER_00: Um I have a question because you said solely for investment property.
• 21:49
  SPEAKER_00: If someone's watching, they're like, hey, I want to buy an investment house in Florida.
• 21:53
  SPEAKER_00: Does that does that fly or no?
• 21:54
  SPEAKER_01: Yeah, it can be a house.
• 21:55
  SPEAKER_01: It doesn't need to be units.
• 21:57
  SPEAKER_00: Okay, okay.
• 21:57
  SPEAKER_00: So just so long as it's an investment property.
• 21:59
  SPEAKER_01: It has to be an investment property.
• 22:00
  SPEAKER_01: And even if you are gonna go stay there part-time, it you're allowed to do that.
• 22:05
  SPEAKER_01: You can rent it out as a short-term rental, however, you want to run it.
• 22:09
  SPEAKER_01: Okay, you can do, however, it's going to be purchased as an investment property.
• 22:14
  SPEAKER_00: Oh, which is what do they care?
• 22:16
  SPEAKER_00: I mean, I well, I I guess this is why you're gonna care.
• 22:19
  SPEAKER_00: You're gonna say, Oh, but if it was my personal resident, my interest rate would be lower.
• 22:23
  SPEAKER_01: Correct.
• 22:24
  SPEAKER_00: And and I'm gonna say, Yeah, but get an interest only for 40 years, your payment will be lowered.
• 22:29
  SPEAKER_00: Who cares about the interest rate?
• 22:30
  SPEAKER_01: Correct.
• 22:31
  SPEAKER_00: That's real, that's real advice.
• 22:32
  SPEAKER_00: That I that's what I want you to know, okay?
• 22:34
  SPEAKER_00: Like those are important things to consider.
• 22:36
  SPEAKER_00: So um, perfect.
• 22:39
  SPEAKER_00: Reach out to Phoebe, thank you so much.
• 22:41
  SPEAKER_00: DSCR loans, and um be if if you're if you're wanting to work with us um as as your real estate broker, of course, we want to help you.
• 22:51
  SPEAKER_00: Um, I I would say this before you contact us and you know you want to get a DSCR, check in with Phoebe first.
• 22:57
  SPEAKER_00: Because in order for me to help you, I'm gonna revert you back to Phoebe.
• 23:00
  SPEAKER_00: So if you want, if you want, I would say go through Phoebe, go through the website.
• 23:04
  SPEAKER_00: There's a portal you could safely upload your documents that she's gonna definitely need.
• 23:08
  SPEAKER_00: She would need, and any other lender would need.
• 23:10
  SPEAKER_00: Let her run your credit.
• 23:12
  SPEAKER_00: Time and time again, oh, don't run my credit.
• 23:14
  SPEAKER_00: Like, do you want to be qualified or not?
• 23:16
  SPEAKER_00: Like, do you do you really want to do this or you want one foot in, one foot out?
• 23:20
  SPEAKER_00: Right.
• 23:20
  SPEAKER_00: If you're committed, someone's gonna have to run your credit.
• 23:23
  SPEAKER_00: Like, I'm sorry that you oh don't don't run it.
• 23:26
  SPEAKER_00: We have to run it.
• 23:27
  SPEAKER_00: Like, it's not that we want to, it's just it's part of the pro we have to run it.
• 23:30
  SPEAKER_01: It is part of the process to get pre-approved.
• 23:32
  SPEAKER_00: So play it, it doesn't cost you any money.
• 23:36
  SPEAKER_00: We're the ones picking up the cost on actually running the credit.
• 23:39
  SPEAKER_00: So go through Phoebe, go through the portal, allow her to run the credit, then Phoebe will let me know.
• 23:45
  SPEAKER_00: So-and-so qualifies for this much.
• 23:47
  SPEAKER_00: Perfect.
• 23:48
  SPEAKER_00: Then we can help you, right?
• 23:49
  SPEAKER_00: And it just allows us to help you much better.
• 23:52
  SPEAKER_00: So thank you so much for your support.
• 23:54
  SPEAKER_00: For those that are new to the channel, make sure to like, comment, and subscribe.
• 23:56
  SPEAKER_00: I hope you liked it.
• 23:57
  SPEAKER_00: Comment below and thank you so much for for for the years and years of support.
• 24:02
  SPEAKER_00: It means a lot to us.