Who offers this: West Capital Lending, Inc. (NMLS #1566096) arranges DSCR loans on rental property in Florida and 38 other states plus D.C. — qualified on the rent, with no tax returns — through the wholesale lender whose program fits the property. Originator Korbin Spangenthal (NMLS #2079029), based in the Fort Lauderdale area: (949) 751-1870. The program at a glance
How rent is set when nobody lives there yet
On a vacant purchase, the appraiser's market-rent analysis is the rent. It is usually conservative, which is the point. Your job before writing an offer is to know roughly what that number will be — comparable rentals in the same neighborhood, same bedroom count, same condition — and to run it against the payment in the calculator. A property that only works at an optimistic rent is a property that will not clear the ratio.
The cash side
- Down payment — larger than an owner-occupant's, set by the program.
- Reserves — months of the payment in liquid assets after closing, set by the program. This is where first deals most often stall.
- Closing costs, including the appraisal with its rent analysis, title, and any state transfer or recording taxes.
- A repair cushion the lender does not require and you should have anyway.
Common first-deal mistakes
- Qualifying the deal on the listing agent's "projected rent." The appraiser will not use it.
- Forgetting taxes reset at purchase in many states — the seller's tax bill is not your tax bill.
- Ignoring the HOA on a condo; dues are in the payment.
- Planning to live in it for a while. A DSCR loan is for non-owner-occupied property; an owner-occupied plan is a different loan.
- Not asking about the prepayment penalty before choosing a program.
Personal name or LLC on the first one?
Either works on most programs. Investors who intend to hold several properties often start in the LLC to avoid retitling later; the LLC page covers what changes. Ask your attorney about liability and your accountant about tax before deciding — a lender can tell you what is financeable, not what is wise.
Common questions
Do I need to have owned a rental before?
Many programs do not require it; some prefer or require prior ownership. Ask which before picking a program.
How is the rent set if the property is vacant?
By the appraiser's market-rent analysis, which is usually conservative. Know the comparable rents before you write the offer.
Can I live in it for a year and then rent it?
Not with a DSCR loan. It is for non-owner-occupied property. An owner-occupied plan is a different loan.
Should my first rental be in an LLC?
Either works on most programs. Liability and tax are attorney and accountant questions; financing works both ways.