Financing a Rental Property Using Future Rents

As the number of renter households continues to grow, diversifying your financial portfolio by adding investment rental properties offers landlords many advantages, including increasing reliable cash flow, building equity faster, and potential tax benefits. Another great advantage is that real estate investors can use their predictive rental income to help qualify for an investment property loan, like our Investor Cash Flow Loan.

Predicting Cash Flow

Being able to predict future receivables and payables is key to qualifying for the Investor Cash Flow loan. An appraisal will help put a value on the property to determine how much it can be rented for on the open real estate market. The appraisal value is based on the rental amount from nearby comparable properties, the location, design and appeal of the property, age and condition, square footage, number of rooms, and any special features. All of this helps determine the potential of future income from rent.
The lender will then take into account the presumptive payables associated with the property, including, the principal, interest, taxes, and any association fees, and calculate the Debt Service Coverage Ratio, or DSCR. A minimum DSCR of 1.0 is recommended to qualify.

Other qualifications that make our Cash Flow Loan attractive to landlords*:

• Borrow up to 80% of the property value.
• Minimum credit score of 580.
• No employment or income documentation required.
• Loan amounts up to $3,000,000.00.
• No limit to the number of financed properties the borrower has.
• Competitive pricing.

Types of Investment Properties that are Eligible

The Investor Cash Flow home loan can be used to finance a variety of different types of homes, including:

• 1 to 4-unit single-family properties.
• Mixed-Use properties that include both commercial and residential space.
• PUD properties
• Warrantable condos that meet requirements laid out by the lender.
• Non-Warrantable condos that meet requirements laid out by the lender.

*Guidelines subject to change. Please contact Luxury Mortgage for the most up-to-date information. Additional conditions will apply.

Ready to Learn More?

Connect with one of our licensed mortgage consultants today to learn more about the Investor Cash Flow Loan.