Popular Loan Types Among Investors 

Apart from the Investor Cash Flow Loans, there’s the Asset Qualifier Home Loans. Here, rather than verifying your income through tax documentation or employment details, your assets pave the way for mortgage qualification. Most lenders don’t enforce debt-to-income stipulations for these loans.

Eligible assets for such loans encompass checking and savings accounts, retirement funds, investment portfolios, and stocks. A minimum post-closure asset value of $500,000 is generally requisite for this mortgage product, viable for both property purchase and refinancing.

Investor Cash Flow Loans Demystified 

Essentially, these loans are non-qualified mortgage options tailored for real estate aficionados. The crux of the loan approval revolves around the expected cash inflow from the property eyed for acquisition. The compelling part? There’s no obligation to submit personal income proof via tax returns or employment records.

Criteria for Investor Cash Flow Loan Eligibility 

Outlined below are typical eligibility norms. However, individual lenders might have bespoke prerequisites.

• Credit Standing: A minimum score of 680 is generally mandatory.
• LTV Assessment: The loan-to-value (LTV) ratio, which evaluates the mortgage amount vis-à-vis the property’s appraisal, should not exceed 80%. To illustrate, for a $400,000 property with a $300,000 loan, the LTV is 75%.
• Property Revenue Assessment: For credit scores ranging between 680-699, the mandated debt service coverage ratio (DSCR) is 1.0. But for scores above 700, while there’s no DSCR floor, the LTV ceiling is 75%.

DSCR gauges a property’s prospective revenue and is calculated as:

DSCR = Annual Gross Rental Income / Annual Debt Commitments (comprising principal, interest, insurance, taxes, and possible homeowners’ association dues)

Annual Gross Rental Income

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• Property Specifications: The loan is apt for an array of properties like short-term rentals or vacation rentals by owner (VRBOs). But, acquisitions of hotels and condos are typically off the table.
• Down Payment: Typically, an upfront payment of a minimum of 20% is expected.

Weighing the Pros and Cons of Investor Cash Flow Loans

Advantages:

• Buy or refinance properties.
• Qualify even with many properties.
• No need for personal income proof.
• No strict checks on debt-to-income ratio.
• Can buy under a company name (if it’s an LLC).
• Faster closing times than typical mortgages.

Drawbacks:

• Loans over $1,500,000 need an extra property check.
• New real estate investors may not qualify.
• You might need a lot of backup funds to get the loan.

Exploring the Potential of an Investor Cash Flow Loan with River Capital 

When contemplating funding alternatives, River Capital emerges as a trusted, holistic mortgage lender, renowned for its avant-garde financing solutions tailored to borrowers who might not fit the traditional mortgage mold.

Eligibility criteria at a glance:

• Credit score minimum of 680.
• Ownership of a primary residence is crucial.
• For loans at or beyond $1,500,000, a second appraisal becomes imperative.