Grow your real estate investing business with the most competitive and transparent private lender for bridge loans (hard money, fix & flip, rehab, ground up construction), DSCR rental loans.

Private Lender for DSCR Loans and Fix & Flip Loans | OfferMarket

Private Lender for DSCR Loans and Fix & Flip Loans

An appraiser is a licensed real estate professional who has completed at least 150 hours of courses and accumulated 1,000 hours of experience. No college degree is required.


 

## Related terms
- [Certified General Appraiser](https://www.offermarket.us/real-estate-glossary/certified-general-appraiser)
- [Certified Residential Appraiser](https://www.offermarket.us/real-estate-glossary/certified-residential-appraiser)
- [Trainee Appraiser](https://www.offermarket.us/real-estate-glossary/trainee-appraiser)

A Licensed Residential Appraiser is a licensed real estate professional who has completed at least 150 hours of courses and accumulated 1,000 hours of experience. No college degree is required.

Licensed Residential Appraiser - Real Estate Glossary - OfferMarket

What is a Licensed Residential Appraiser?

A real estate appraisal is the process of developing an opinion of value for real property. Appraisals are performed by licensed real estate appraisers.

 

Appraisals differ from Broker Price Opinion (BPO) and Real Estate Valuation in that appraisals can only be performed by licensed real estate appraisers.

 

You can receive a [free real estate valuation estimate](https://www.offermarket.us/tools/free-real-estate-valuation), compliments of OfferMarket.

Real estate appraisal is the process of developing an opinion of value for real property. Appraisals are performed by licensed real estate appraisers.

Appraisal - Real Estate Glossary - OfferMarket

What is a real estate Appraisal?

An individual training to become a licensed real estate appraiser who has completed at least 75 hours of education.

 

## Related terms
- [Certified General Appraiser](https://www.offermarket.us/real-estate-glossary/certified-general-appraiser)
- [Certified Residential Appraiser](https://www.offermarket.us/real-estate-glossary/certified-residential-appraiser)
- [Licensed Residential Appraiser](https://www.offermarket.us/real-estate-glossary/licensed-residential-appraiser)

A Trainee Appraiser is an individual training to become a licensed real estate appraiser who has completed at least 75 hours of education.

Trainee Appraiser - Real Estate Glossary - OfferMarket

What is a Trainee Appraiser in real estate?

Revenue - Operating Expenses

 

Net Operating Income is used to calculate capitalization rate ("cap rate"), a fundamental quantitative valuation metric for real estate investing.

 

Depending on the type of real estate, revenue can include: 

 

- Rental revenue
- Service fees
- Parking revenue
- Vending machine revenue

 

Operating expenses include:

 

- property management
- vacancy
- uncollectible rent revenue
- insurance
- property taxes
- maintenance

Net Operating Income ("NOI") = Revenue - Operating Expenses. Learn how to calculate NOI.

NOI - Net Operating Income - Real Estate Glossary - OfferMarket

What is Net Operating Income ("NOI") in real estate?

## What does DSCR mean?

 

**DSCR** means *Debt Service Coverage Ratio*. DSCR is a ratio calculated by taking a rental property's operating income and dividing it by the cost of a loan. DSCR is a metric private lenders and commercial lenders use to determine the amount of a loan they are willing to provide for a single family or multi-family rental property.

 

## How do you calculate debt service coverage ratio?

 

Use our handy [DSCR Calculator](https://www.offermarket.us/tools/dscr-calculator) to quickly and accurately determine DSCR and maximum loan amount!

 

## Method 1: Net Operating Income ÷ Debt Service

 

### Key:

 

**Net Operating Income ("NOI")** = Rent Revenue - Taxes - Insurance - HOA Dues - Maintenance - Property Management

 

Debt Service = Mortgage Principal + Mortgage Interest

 

A DSCR of 1.0 means the property generates exactly net operating income to cover the cost of mortgage payments. 

 

## Method 2: Adjusted NOI ÷ PITIA

 

**Adjusted NOI**: Rent - Maintenance - Utilities - Property Management 

 

**PITIA**: Mortgage Principal + Mortgage Interest + Taxes + Insurance + HOA Dues

 

This second method tends to result in slightly lower DSCR, so it's important to understand how your private lender calculates DSCR.

 

## DSCR Example

 

Let's say you own a rental property that generates $30,000 in NOI and the monthly mortgage payments (principal and interest) are $2,000 or $24,000 annually. That means the property has a DSCR of 1.25.

 

## What debt service coverage ratio do private lenders require?

 

Private lenders typically require a DSCR of 1.2 or higher to make sure the income generated by the property can conservatively repay the loan. 

 

## How does DSCR relate to LTV?

 

DSCR varies based on the target [LTV (loan-to-value)](https://www.offermarket.us/real-estate-glossary/ltv) because the amount of the loan impacts the debt service component of the ratio.

 

## Learn about Private Lenders

 

Read [The Ultimate Guide To Real Estate Private Lenders](https://www.offermarket.us/blog/real-estate-private-lenders) to learn everything there is to know about working with private lenders to grow your real estate investing business.

 

## Looking for a Private Lender for Bridge Loans and DSCR Rental Loans?

 

 Get approved by [OfferMarket Capital](https://www.offermarket.us/capital), our private lending division.

Debt Service Coverage Ratio ("DSCR") = NOI ÷ (Mortgage + Taxes + Insurance). Learn how to calculate  DSCR.

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Debt Service Coverage Ratio (DSCR) - OfferMarket

What is Debt Service Coverage Ratio ("DSCR") in real estate?

## What is a Personal Financial Statement?

 

A Personal Financial Statement is a document that real estate investors applying for a loan provide to lenders in order to communicate their assets, liabilities, and income.

 

In many cases, the Personal Financial Statement is part of a loan application form that also includes legal questions. 

 

## What information is included in a Personal Financial Statement?

 

### Assets Section of the Personal Financial Statement

 

The assets section of the personal financial statement is important because private lending to real estate investors is generally asset-backed. This is where the term hard money comes from, because the loan is backed in large part by real estate which is commonly referred to as a "hard asset".

 

**The asset column will include:**

 

- Cash
- Accounts Receivable
- Retirement Account(s)
- Brokerage Account(s)
- Life Insurance Cash Value
- Real Estate
- Automobile(s)
- Other Assets

 

### Liabilities Section of the Personal Financial Statement

 

The liabilities section of the personal financial statement is important because the private lender needs to understand what you owe in order to determine the degree of risk that they will not be able to recover the value of the loan you are applying for.

 

**The liability column will include:**

 

- Accounts Payable	
- Notes Payable	
- Credit Card Loans	
- Margin Loans	
- Student Loans
- Real Estate Mortgages/Loans
- Auto Loans
- Other Liabilities

 

## How to calculate Net Worth

 

Net Worth = Assets - Liabilities

 

Your net worth is simply your **total assets** minus your **total liabilities**.

 

For example, if your assets are $10,000,000 and your liabilities are $5,000,000, then your net worth is $5,000,000.

 

### Income Section of the Personal Financial Statement

 

Real estate private lenders such as OfferMarket Capital do not require salaried employment. This is a stark contrast to conventional mortgage lenders who generally require a W-2 and proof of employment. 

 

Still, the lender will want to understand your income profile.

 

**The income section will include:**

 

- Salary
- Real Estate Income
- Investment Income
- Other Income

 

### Legal Section of the Personal Financial Statement

 

Real estate private lenders will commonly ask the following questions to determine additional risk factors that can impact their ability to underwrite the loan. 

 

- Are you a U. S. Citizen?
- Have you ever had a foreclosure, deed-in-lieu, or loan modification?			
- Are you defendant in any legal action or have unsatisfied judgments against you?		
- Are you under indictment, on probation or parole or ever been charged or convicted for a criminal offense?		
- Have you ever gone through a bankruptcy or made a general assignment?	

 

## Personal Financial Statement Template

 

Now it's time to see an example of a personal financial statement. For your reference, here is OfferMarket Capital's [Personal Financial Statement template](https://docs.google.com/spreadsheets/d/e/2PACX-1vQyDEd-yx6rgWSQxyWJ-w5Rl0u9ob3dCdZnWD9G6jFpVHYqE0KMEApHvPZlMaQJ3dbDNPBM6P8H04Ll/pubhtml?gid=2113946803&single=true).

 

## Personal Financial Statement Excel Template

 

**To download the Personal Financial Statement Excel template:**

 

1. Go to our [Personal Financial Statement Google Doc](https://docs.google.com/spreadsheets/d/1Ur6_hqHhGWKHOKgi6fYkqpz8HDCv2Ob1FGcNoyOKgcs/edit?usp=sharing)
2. Click 'File' in the top left menu
3. Click 'Download' in the dropdown menu
4. Select 'Microsoft Excel (.xlsx)' from the list of options

 

## Personal Financial Statement PDF Template

 

**To download the Personal Financial Statement PDF template:**

 

1. Go to our [Personal Financial Statement Google Doc](https://docs.google.com/spreadsheets/d/1Ur6_hqHhGWKHOKgi6fYkqpz8HDCv2Ob1FGcNoyOKgcs/edit?usp=sharing)
2. Click 'File' in the top left menu
3. Click 'Download' in the dropdown menu
4. Select 'PDF (.pdf)' from the list of options

 

## Private Lending Platform

 

Get access to cheap capital from [OfferMarket Capital](https://www.offermarket.us/capital) to grow your fix and flip and rental operation.

 

## Related concepts

 

- [Schedule Of Real Estate Owned](https://www.offermarket.us/real-estate-glossary/schedule-of-real-estate-owned)
- [Collateral Desktop Analysis](https://www.offermarket.us/real-estate-glossary/collateral-desktop-analysis)
- [ISAOA/ATIMA](https://www.offermarket.us/real-estate-glossary/isaoa-atima)
- [Landlord Insurance](https://www.offermarket.us/real-estate-glossary/landlord-insurance)
- [USPAP](https://www.offermarket.us/real-estate-glossary/uspap)
- [DSCR](https://www.offermarket.us/real-estate-glossary/dscr-debt-service-coverage-ratio)

A Personal Financial Statement is a simple overview of your Assets, Liabilities and Income that is submitted to and reviewed by a lender.

Personal Financial Statement - Real Estate Private Lender

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Personal Financial Statement Real Estate Private Lender.jpg

Personal Financial Statement | OfferMarket Real Estate Glossary

Personal Financial Statement

## What is a quadplex?

 

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A quadplex is a four-unit apartment building, with four completely separate units. For legal reasons to qualify as a quadplex, all units must have four locks to secure all of its apartments. Unlike a single family home or single family residence ("[SFR](https://www.offermarket.us/real-estate-glossary/cash-out-refinance)"), a quadplex contains four completely separated living units under one roof:

 

- 4 entrances (four different keys and locks)
- 4 kitchens
- 4 separate utility meters (typically)

 

Each unit has their own front door for privacy. There are many different layouts that quadplexes can have, such as the units can be stacked on top of each other, with two units per floor or all on the same level but the key idea is that all of them have a separate entrance, separate kitchen, separate bathrooms and living spaces.

 

## Why are quadplexes an attractive real estate investment?

 

Quadplexes are more attractive than SFRs, duplexes and triplexes to many rental property investors because they qualify for residential (non-commercial, 1-4 unit) mortgage loans. This is a huge advantage, which is often overlooked. By default they qualify for a huge amount of financing or leverage which immediately improves many financial metrics by which rental properties are judged. This is all due to the fact that quadplexes qualify as single family homes under conforming (government sponsored) loans. We seen first time buyers, with as little as 10% down qualifying for loans of up to a million dollars to take over quadplex properties, giving them a great head start on building their rental real estate portfolios. 

 

This property type allows an investor to diversify tenants while maintaining one common housing structure to maintain. Many investors would much prefer owning and managing a quadplex instead of 4 single family houses or 2 duplexes. Quadplexes are also wonderful for [house hacking](https://www.offermarket.us/real-estate-glossary/house-hacking) as you can live in one unit and rent out the other three units which should easily pay your [PITI](https://www.offermarket.us/real-estate-glossary/piti) and provide [free cash flow](https://www.offermarket.us/real-estate-glossary/free-cash-flow)

 

## What are the Pros of Living in a Quadplex?

 

The pros of living in a quadplex are that you can live with your friends and family nearby. Some people might think that living in a quadplex is not as good as living in separate houses, but the pros of having own entrance, bathrooms, living space while sharing some of the wall with your neighbors might actually be beneficial for your utility bills. 

 

Heat and cooling for a quadplex structure will definitely be more efficient than doing it for a similar sized stand alone structure. Additionally, living in a quadplex you don't have to share common spaces with other people, you can make as much noise as you want without bothering anyone, and the tenants that you rent the rest of the property out will enjoy their own privacy. Apart from that, it’s common to rent out extra units to tenant, thus producing a rental income which you can use to offset your own living expenses. There are also tax benefits to consider then looking at owning a quadplex, such as depreciation and ability to write off maintenance expenses from the taxable rent that you receive form other tenants. 
 

Finally, one of the biggest benefits is ease of maintenance, since you live on the property, you will be intimately aware of the condition of the property and will be able to keep a close eye on needed repairs and keep problem tenant in check. While this might be extra work, your bottom line will appreciate it because you wont have to hire a dedicated property management that will cut into your margin, not to mention potential inflation of prices since you won’t be aware of how much time he actually spends on maintaining your property. 

 

## What are the Cons of Living in a Quadplex?

 

Living in a quadplex can be an exciting experience, but there are some cons too. For instance, the living space is smaller, and it may be difficult to find parking on the street. One of the most significant disadvantages of living in a quadplex is that often the apartments are small and do not offer much living space for people who like to entertain guests or even just want to have their own space for themselves. Additionally, some people may not feel comfortable with having so many neighbors so close by and some noises might be audible through the walls, as well as that there is no yard for the kids to play in, parking can be difficult depending on the neighborhood, and it might not suit those who enjoy a quieter lifestyle.

 

If you don’t take care of tenant selection you might allow bad tenants to move into your property. This becomes a larger nuisance for you and your tenant since you share walls with this individual and you might hear or feel the effects of their presence. On the plus side you will be keenly aware of the issues since you will be close by and will be able to put a stop to offending behavior before it gets worse or out of control, driving away other tenants and potentially causing financial damage to your property.

 

Finally, being a landlord is a job. Being a landlord for tenants that live right next door presents unique social challenges that not everyone might be up to, even if there are good financial incentives to do so. You will have to be responsible for the property and its condition, and any short-falling will impact your lifestyle. Needy tenants can simply knock on your door any time of the day to request anything they want. Being a landlord that lives on the property is not as simple as renting it out and just leaving it at that.
 

## How do I find quadplexes for sale?

 

Buying a quadplex could be a bit tricky. The availability of quadplexes varies based on the local market. Here is where you can find your next quadplex investment property:

 

- Zillow
- Redfin
- [OfferMarket](https://www.offermarket.us/listings)
- Local wholesaler [buyer's list](https://www.offermarket.us/guides/real-estate-wholesaling-how-to-build-a-buyers-list)

 

## Conclusion

Ultimately, quadplexes are best positioned for [house hacking](https://www.offermarket.us/real-estate-glossary/house-hacking) , where you can live in one of the units and rent out remaining three. This is the best possible scenario for [house hacking](https://www.offermarket.us/real-estate-glossary/house-hacking) since anything over four units won’t qualify for a conventional mortgage, single family mortgage and will be considered a multi-family property which will needs a different kind of debt financing with its own specific hurdles, such as different standards to qualify and a higher interest rate since its aimed at professional investors. 

 

## Related concepts:

 

- [SFR](https://www.offermarket.us/real-estate-glossary/sfr)
- [Duplex](https://www.offermarket.us/real-estate-glossary/duplex)
- [Triplex](https://www.offermarket.us/real-estate-glossary/triplex)
- [Fourplex](https://www.offermarket.us/real-estate-glossary/fourplex)
- [House Hacking](https://www.offermarket.us/real-estate-glossary/house-hacking)

A quadplex is a 4-unit house. Quadplexes are very attractive to rental property investors. There's more to learn about quadplexes at OfferMarket. 