If you're looking to purchase investment property in a quieter state as you build up your portfolio, Kentucky's got you covered. This less competitive market enjoys lower property values than you'd find elsewhere, which is great for those who would like a lower loan amount as they work to build equity for more high-stakes investments elsewhere.
The average home value in Kentucky is $247,800, which is incredibly reasonable for investment properties; in addition, rental income is about $1,295 per month, which means you'll be more than able to cover your monthly payments.
Another great reason to invest in Kentucky is this - other entities are pouring money in too! UPS is in the process of opening new facilities in two Kentucky counties to the tune of $334 million, which assures you that your purchase will only grow in value as the economy improves.
Unlike a traditional mortgage loan, borrowers qualify for a DSCR loan based on the property's income rather than their personal income, making them a great choice for investors with mortgage experience. For DSCR mortgages, you don't need to show tax returns, pay stubs, or your debt-to-income ratio; instead, the debt service coverage ratio of the investment properties is front and center.
To calculate DSCR, lenders divide the property's cash flow by the mortgage payment: a positive DSCR means that the property makes enough profit to cover its debts, while a negative ratio means it's losing money. Your ratio is identified by a rent schedule of the investment property, which proves its cash flow.
In addition to proving that the rental property is making at least 1.25 times what it costs, you'll also need to have a minimum credit score of 640, a loan-to-value ratio of 80 or less, and provide a down payment of at least 20% in addition to closing costs. It's a flexible financing - or refinancing - option, especially as the process is far more streamlined than for other mortgage loan types.
If you're ready to spice up your real estate portfolio, Kentucky is the place to go. This hidden Southern gem provides the prudent real estate investor with a decent cash flow at a very reasonable sum.
Visio Lending is the premier DSCR lender in the country, serving investors from Texas to Tennessee and beyond. We've provided countless investors with competitive loan terms, great rates, and the support they need to find secure great investment property throughout the country - and we're ready to lend to you, too. Contact us today to see whether you qualify for a DSCR mortgage loan or refinance.
Check out some of Visio Lending's recently closed DSCR loans in Kentucky.
Louisville, KY
Lexington, KY
Bardstown, KY
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Visio Lending is the nation's premier lender for buy and hold investors offering, long-term loans for SFR rental properties, including vacation rentals.