Frequently Asked Questions

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 A DSCR (Debt Service Coverage Ratio) loan is a type of financing that focuses on the cash flow of a property rather than the borrower's personal income or credit score. It's commonly used by real estate investors. The DSCR is a ratio that compares the property's annual income (usually from rent) to its annual debt payments (mortgage and other expenses).

For example, if a property generates $100,000 in rental income and the annual debt payments are $80,000, the DSCR would be 1.25 ($100,000 ÷ $80,000). A higher DSCR indicates a more profitable investment and a lower risk for the lender.

DSCR loans are ideal for investors who want to secure financing based on the property’s ability to generate income, making them a popular choice for both new and experienced investors.

A DSCR loan is a great choice for real estate investors because it focuses on the income-producing potential of your property, rather than personal credit or income. This makes it easier for investors to qualify, especially those with multiple properties or non-traditional income sources.

With a DSCR loan, the key factor is the property’s ability to generate enough income to cover the mortgage and other expenses. If the property’s rental income exceeds the debt obligations (with a DSCR ratio of 1.0 or higher), you can secure financing that’s tailored to your investment.

This type of loan offers more flexibility, faster approval times, and can be a good option if you're looking to scale your real estate portfolio without relying on personal financial history. It's a straightforward way to invest based on the potential of the property itself.

 LTV (Loan-to-Value) is a financial ratio that lenders use to assess the risk of a loan. It compares the amount of the loan you are borrowing to the appraised value or purchase price of the property, whichever is lower. For example, if you're buying a property worth $200,000 and you're taking out a loan for $150,000, the LTV ratio would be 75% ($150,000 ÷ $200,000).

A lower LTV ratio typically indicates less risk for the lender, as the borrower has more equity in the property. Lenders often offer better terms, like lower interest rates, for borrowers with lower LTV ratios. For investors, understanding LTV is key to determining the amount of financing you can secure and the potential cost of your loan.

A mixed-use property is a real estate building or development that combines different types of spaces, such as residential, commercial, and sometimes industrial, all within the same structure or complex. For example, a mixed-use property might have apartments on the upper floors with retail shops or offices on the ground floor.

These properties are popular in urban areas where space is limited and are ideal for investors looking to diversify their income streams. The rental income from a mixed-use property can come from both residential tenants and businesses, which can help provide more stability and reduce investment risk. Mixed-use properties are a great option for investors looking for both residential and commercial opportunities in one location.

 A foreign national is an individual who is not a U.S. citizen or permanent resident (Green Card holder). Typically, foreign nationals are residents of other countries who wish to invest in U.S. real estate. In the context of real estate investing, foreign nationals may qualify for financing options, such as DSCR loans, but their qualifications may differ from those of U.S. citizens, particularly when it comes to documentation and down payment requirements.

Foreign nationals usually need to provide proof of their identity, foreign credit history (if available), and may need to meet higher down payment requirements compared to domestic investors. Understanding these requirements is important for foreign nationals interested in investing in U.S. properties.