Florida DSCR Loans

Ask about our low rates

If you you’re looking for a DSCR rental loan in Florida, we have you covered.

West Forest Capital is a leading Florida DSCR rental loan provider, financing real estate investments up to $3 million.

What is a DSCR Rental Loan?

A DSCR (Debt Service Coverage Ratio) rental loan is long term real estate financing – often up to 30 years
Personal income and personal credit are not significant factors in the underwriting
The loan is based off the property value, and the income it generates
Fast closing, can be done within 2-3 weeks

Please contact me

(Investment Properties Only)

I need financing on...

I have a specific property...

Talk or Text

Property Types

Lending Parameters

Loan Size	$100,000 - $3,000,000
Loan to Value	Up to 80%
Primary Residence	Not accepted
Rental status	Rented preferred but not required (can use market rents)
Term	Up to 30 years
Format	Fixed or Variable available
Rate	Varies by product, correlation with Treasury Rates
Points	Typically 2%

Counties Covered

We provide DSCR rental loans in the following counties in Florida:

Broward County
Collier County
Duval County
Hillsborough County
Martin County
Miami-Dade County
Orange County
Palm Beach County
Pinellas County
Volusia County

Recently Funded Bridge Loans

Why Use a Florida DSCR Rental Loan

If you own your own business. Business owners have many expenses and unpredictable income. Your business might have significant income, but you personally might not. Since a DSCR loan does not require personal income, it’s ideal for business owners.
If you have imperfect credit. To qualify for a DSCR rental loan, the underlying customer metrics, such as FICO score, are less important than the actual asset – your rental property. Typically, if your FICO is in the mid-600s or above, we can work with you.
Fast approval process. DSCR rental loans have a much faster approval process (2-3 weeks) than traditional loans, allowing investors to secure financing quickly and take advantage of investment opportunities as they arise.
Flexible Repayment Terms. DSCR rental loans come with flexible repayment terms. This can be especially beneficial for investors who have multiple rental properties and need to manage their cash flow effectively. Examples of options are 30 year fixed rate or a 5/1 ARM (which simply means the rate is fixed for 5 years and then resets every year going forward; there are also 7/1 ARMs, and so on).

Why Choose a Florida DSCR Rental Loan

Investing in rental properties in the state of Florida has historically yielded great returns: rents that grow much faster than the national average, historically strong appreciation as more and more people move to the state, and the added benefit of real estate depreciation for tax purposes. The most important aspect in growing your rental portfolio is finding the right capital partner. However, this can sometimes be tricky as most lenders – and therefore most loan products – are not designed for real estate investors who are looking to get a loan primary based on the property and its ability to generate income.

Enter Florida DSCR rental loans. DSCR loans offer a smart alternative for property financing without the annoying document requests and stringent requirements typically associated with run of the mill bank loans. DSCR rental loans also allow investors long term financing, up to 30 years, at attractive rates. It’s worth noting that banks only offer their best rate on short duration loans, typically 3-5 years in length. This creates a refinancing risk in case property values fall or rates rise. Instead, it’s better to lock in long term financing with a Florida DSCR rental loan.

Florida offers attractive real estate opportunities in each part of the state. Urban centers like Miami, Orlando, Tampa and Jacksonville accommodate a busy lifestyle with an ever-growing corporate base. As companies continue to move, and employees follow, demand for housing is at an all-time high. Other areas such as West Palm Beach, Fort Lauderdale, St. Petersburg, Naples, and Kissimmee offer elegant suburban living with convenient access to nearby larger cities. Renters, particularly those in search of single-family homes, often gravitate towards these cities, fueling a robust demand for rental properties. Consequently, Florida real estate investors can realize tremendous gains both in rental income and property valuations.

Florida’s economy has been very strong and continues to grow. The state feels more financially stable than at any time in the past. No longer is the economy mostly tourist dependent; rather, an influx of industries have created steady new jobs, boosting job opportunities and wages. This trend has put upwards pressure on real estate rental prices, which fits nicely with the requirements of a DSCR loan.

Getting a DSCR Rental Loan in Florida

Off the bat, it’s important to know that a DSCR Rental Loan in Florida is much easier to quality for than a traditional bank loan. Bank loans have a lot of restrictions, many of which are tied to the person representing the property (credit, income, etc) but not necessarily the property itself. So, for example, if you have other debts or have too many properties, a bank may not provide you a loan on a real estate property that has exception cashflow.

However, Florida real estate investors who opt for DSCR rental loans understand that this loan type allows lenders to evaluate each property individually, and underwrite the property itself rather than the person managing it. Finally, you might be asking yourself about the timing. More good news here – the entire DSCR rental loan process takes just two to three weeks.

Asset Based Lender Providing DSCR Rental Loans in Florida

As a Florida asset-based lender focused on rental loans, we primarily only look for one thing: does the property’s operating income (NOI) surpass the property’s debt service. We often get asked about credit score requirements – and yes there is a minimum score in the mid 600s, but other than that, we don’t require a high FICO.

Talk to us about your real estate investment property and want type of financing you are seeking. Chances are a Florida real estate DSCR rental loan is your best bet.

Frequently Asked Questions

1.
What is a DSCR rental loan in Florida, and how does it differ from a traditional mortgage?

Tailored for real estate investors, DSCR (Debt-Service Coverage Ratio) rental loans target individuals who earn rental income. Unlike traditional mortgages, these loans emphasize the property’s income potential rather than the borrower’s personal financial situation. This unique approach allows investors to qualify based on the property’s cash flow.

2.
Who is eligible for a DSCR rental loan, and what are the requirements to qualify?

You can usually be considered for a DSCR loan if you fulfill the following requirements:

The property is a condo, single-family residence, a duplex, triplex, quadplex, or multi-family
Investment property, cannot be primary residence
The property does not require rehab
The property is an LLC rather than a personal name (can be transferred to an LLC upon closing)
Insurance and taxes are up to date

Approval for DSCR loans isn’t solely based on the borrower’s credit or income but rather on the value of the asset, making it possible for those with less-than-ideal FICO scores to be approved.

Furthermore, the property must have the capability to generate income, so vacant land or primary residences are not acceptable.

3.
What is the minimum DSCR ratio required for a DSCR rental loan, and how is it calculated?

Lenders typically require a minimum Debt Service Coverage Ratio (DSCR), which typically ranges from 1.20 to 1.25, though it varies. This ratio is determined by dividing the property’s annual Net Operating Income (NOI) by its annual debt service (comprising principal and interest payments). The DSCR helps lenders evaluate if the property can generate enough income to cover its expenses and loan payments.

4.
How does a DSCR rental loan help borrowers with a non-traditional income source or non-W2 income?

DSCR rental loans in Florida offer advantages to borrowers with atypical income sources like self-employment or rental proceeds, which may not meet traditional mortgage standards. These loans analyze the property’s income potential rather than solely considering the borrower’s W2 income, widening the scope for various investors.

5.
What are the benefits of a DSCR rental loan compared to other types of loans or financing options?

With DSCR rental loans, borrowers gain access to various advantages, including the ability to secure higher loan amounts determined by property income, flexible eligibility criteria, and potential tax benefits. Additionally, investors can use the property’s cash flow for financing without affecting personal debt-to-income ratios.

6.
What are the common misconceptions about DSCR loans, and how can borrowers avoid them?

Common misunderstandings arise when people confuse DSCR ratios with personal debt-to-income ratios and incorrectly believe that only properties with significant rental income qualify. To steer clear of these misconceptions, borrowers should understand how DSCR ratios are determined and seek advice from lenders specializing in real estate investment loans, such as West Forest Capital.

7.
What are the potential drawbacks of a DSCR loan, and how can borrowers minimize their risk when taking out one?

Downsides could involve higher interest rates than those found with traditional mortgages and stricter property eligibility criteria. To offset these challenges, borrowers should conduct comprehensive property due diligence, maintain ample cash reserves, and prepare for potential fluctuations in rental income.

8.
How does a lender evaluate a borrower's ability to repay a DSCR rental loan, and what factors do they consider?

Lenders gauge a borrower’s repayment capability by examining various factors, including the property’s Debt Service Coverage Ratio (DSCR), credit history, property location, rental market conditions, and overall financial stability. They require consistent rental income, ample cash reserves, and a strong repayment capacity.

9.
How can borrowers improve their chances of getting approved for a DSCR loan, and what steps should they take before applying?

Improving approval likelihoods involves preparing comprehensive financial records, highlighting proficiency in property management, and partnering with lenders specializing in DSCR loans, such as West Forest Capital. Conducting meticulous property assessments and developing a robust business plan can also enhance the application.

10.
How can borrowers use a DSCR rental loan to invest in a rental property and expand their rental property business, and what considerations do they need to make before doing so?

With DSCR rental loans in Florida, borrowers can acquire new rental properties or refinance existing ones, utilizing rental income for expansion. Important factors to consider include property location, market trends, rental demand, property management strategies, and potential renovation costs. Evaluating these elements ensures a profitable investment and sustainable growth of the rental business.