Build a positive cash flow real estate portfolio with just one loan
Griffin Funding Bayside offers real estate investment loans, or DSCR loans. A DSCR loan is a type of non-QM loan for new or seasoned real estate investors. With this particular program, no income verification or tax return is required. You can easily qualify based on the cash flow of the property. As a real estate investor, you can avoid the high rates and high points of private hard money loans, as well as lengthy approval processes.
Debt Service Coverage Ratio is a ratio of a property’s annual gross rental income and its annual mortgage debt, including principal, interest, taxes, insurance, and HOA (if applicable) . Lenders use gross rental income instead of net operating income to calculate DSCR in order to qualify. Griffin Funding Bayside also analyzes the amount of a loan that can be supported by income from the property to determine the amount of income coverage for a specific loan amount.
Example of calculating the debt service coverage ratio:
A real estate investor might look for a property with gross rental income of $ 50,000 and annual debt of $ 40,000. When you divide $ 50,000 by $ 40,000, you get a DSCR of 1.25. This means that the property generates 25% more income than what is needed to pay off the loan. It also means that there is a positive cash flow in the eyes of the lender.
Here are some reasons to start Where continue to invest in real estate:
Leverage of other people’s money (OPM). You don’t have to be a millionaire or have hundreds of thousands of dollars in the bank to invest in real estate. If you pay 20% down payment, a bank or lending institution will provide the rest of the funding.
Cash flow. This is the monthly profit you make after all the expenses associated with the property. It’s a continuous stream of residual income if your property is purchased and managed properly. Now imagine if you used a cash-out refinance on your first property to buy a second property? You could continue this trend and continue to buy properties, with the money from your initial investments to buy more income generating properties. We call this the “property multiplier effect”.
Appreciation and tax benefits. Even though this particular program is geared towards long-term investment goals, if your property has risen in value and you decide to sell, the appreciation is your profit. Tax credits are available for social housing, the rehabilitation of historic buildings and certain other real estate investments. Tax credits are deducted directly from the tax you owe. You also get an annual capital cost allowance, which is usually a percentage of the property’s value that you can deduct as an expense from income. We recommend that you use a CPA to understand the potential tax benefits of owning investment property
Also, fewer ups and downs than the stock market.
Apply for a loan for non-QM investment property
Start or continue building your real estate investment portfolio without the need for a private loan. Our DSCR loans are a great mortgage option for new and seasoned investors to help you build your portfolio without the mortgage challenges getting in your way.
Want to know more about our non-QM loans before you apply? Contact us online or call us at 619-393-8458 to discuss.