How Do You Get a DSCR Loan for an Airbnb?

How Do You Get a DSCR Loan for an Airbnb?

Hey Beau, How Do You Get a DSCR Loan for an Airbnb?

Thanks,
Simeon

Timestamps
[00:1] Doing the same steps we do on a DSCR loan
[00:15] What’s the purchase price? Address of the property? Annual taxes and insurance?
[00:21] Is there an HOA?
[00:25] What is the projected Airbnb revenue annually?
[00:30] What’s the expected income if it’s a long-term rental?
[00:39] Majority of lenders do rental surveys
[00:52] Beau always tries to see if it can be qualified for a DSCR loan
[01:03] Come up with an evaluation based on using an AirDNA algorithm
[01:24] Where can we get the best pricing?
[01:38] More financing options

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How to Get a DSCR Loan for Your Airbnb Investment Property
Are you considering investing in an Airbnb property and wondering how to get a DSCR loan? In this post, we'll break down the steps you need to take to secure financing for your Airbnb property.

What is a DSCR Loan?
DSCR stands for Debt Service Coverage Ratio, which is a financial metric used to determine if an investment property generates enough income to cover its debt obligations. A DSCR loan is a type of financing that uses the DSCR metric to evaluate the borrower's ability to repay the loan.

Steps to Getting a DSCR Loan for Your Airbnb Property
Gather property information: To get a DSCR loan, you'll need to provide information about the property, such as the purchase price, address, annual taxes, annual insurance, and whether there's an HOA.

Determine projected Airbnb revenue: You'll need to estimate how much annual revenue your Airbnb property is expected to generate. If you plan to rent it out long-term, you'll also need to provide expected income from a long-term rental.

Qualify with lenders: Some lenders use rental surveys to determine the projected rental income for a property, while others may use projection-based algorithms like AirDNA. If your property doesn't qualify for a regular DSCR loan, you may need to explore projection-based options.

Compare financing options: Once you've qualified with lenders, it's time to compare financing options. Every lender has different pricing and credit score requirements, so it's important to shop around to find the best deal.

Benefits of Getting a DSCR Loan for Your Airbnb Property
Getting a DSCR loan for your Airbnb property has several benefits, including:

Lower interest rates: DSCR loans typically have lower interest rates than other investment property loans.

Higher loan amounts: With a DSCR loan, you may be able to qualify for a higher loan amount than with other types of financing.

Flexibility: DSCR loans give you more flexibility in terms of financing options and repayment terms.

Conclusion
Investing in an Airbnb property can be a profitable venture, but it's important to secure the right financing to make it work. By following the steps outlined in this post, you can get a DSCR loan for your Airbnb property and take advantage of the benefits it offers. Remember to compare financing options and work with a lender who understands your unique needs as an Airbnb investor.

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#dscrloans #dscr #airbnb

About Beau: Beau Eckstein is a real estate entrepreneur, TV personality, and commercial mortgage advisor, specializing in construction financing and multi-family lending.

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