Investing in real estate can be an exciting opportunity. It gives motivated buyers the chance to diversify their investment portfolio, build wealth and potentially help them earn a bit of extra cash every month–but becoming a landlord isn’t without its challenges. Fortunately, finding the right type of financing doesn’t have to be one of them.
At Luxury Mortgage Corp, we’re pleased to offer home financing opportunities for real estate investors, including the innovative Investor Cash Flow program. This unique loan product is designed with today’s real estate investor in mind, providing competitive pricing on a mortgage that can help secure the purchase of a residential rental property.
Investor Cash Flow Mortgage – The Basics
Simple, Accessing Financing
The Investor Cash Flow mortgage program is a powerful financing tool that allows the cash flow on the property to be used to qualify for the loan. No tax returns or income verification is required, making it an accessible option, even for new investors.
No Limit to Number Financed
With this program, there is no limit to the number of properties financed, which could make it an ideal solution for established investors with a substantial portfolio.
Cash Flow Qualifier
Unlike other investment property loans, the Investor Cash Flow program allows the borrower to qualify based on the anticipated cash flow from the property once it is rented. There are a few additional guidelines that must be met and the debt service coverage ratio (DSCR) must be used to calculate the funds that may be used to qualify.
The DSCR is defined as the gross rent divided by the qualifying principal, interest, taxes, insurance and association dues (PITIA). The DSCR must be greater than or equal to 1. For example, if the gross rent is $1,000 and the qualifying PITIA is $700, you would calculate the DSCR by dividing $1,000 by $700, which would be roughly 1.43.
If there is already a lease in place on the subject property, the current rent will be used in the DSCR calculation. If there is no lease in place yet, the rent will be the market rental price, determined by an appraisal.
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Benefits of the Program
Here are just a few great reasons to consider the Investor Cash Flow mortgage:
- Eligible borrowers can finance up to 80% of the property value
- Credit scores as low as 580 are acceptable
- No employment or income documentation required
- Loan amounts available up to $3,000,000
- Competitive pricing
- No limit to the number of financed properties
Expand Your Portfolio Beyond Fannie & Freddie’s Limits
With Fannie Mae, investors with 7-10 financed properties must meet strict credit score requirements as well as additional reserves requirements. Freddie Mac has similar restrictions and requirements for investors. With Luxury Mortgage’s Investor Cash Flow program, eligible borrowers have more freedom to obtain financing, even with an established portfolio of rental properties and/or second homes.
Ready to Learn More?
If the Investor Cash Flow mortgage sounds like a good solution for your investment property loan needs, don’t hesitate to connect with us! Give us a call toll-free at 888-379-0303 or contact us through our website.