Real Estate Investment in South Florida Using DSCR Loans

Real Estate Investment in South Florida Using DSCR Loans

Real Estate Investment in South Florida Using DSCR Loans

We spoke with Mayer Dallal, Managing Director of Mbanc, about real estate investment in South Florida and advice to those considering investing in the area. 

Jeff Bezos made headlines not so long ago when a world-famous billionaire and Amazon founder bought a $68 million mansion on an island near Miami. This is a homecoming for Bezos—he graduated from high school in Miami, and his parents are based in the area. 

Another global celebrity, Lionel Messi, a soccer superstar, has recently bought a $10.8 Florida waterfront mansion. The Miami area has always attracted the world’s wealthy and famous. There are opportunities for all types of real estate investors in Miami, and South Florida in general, even amidst the uncertain housing market.

Why Invest in South Florida? 

Mayer says South Florida tends to weather economic slowdowns better because of the internal migration from states like California or New York. On top of that, South Florida has a strong tourism industry, which translates into opportunities in the short-term rental and hospitality markets. The tax environment is favorable (no state income tax, predictable property taxes), and the government of Florida is known for its business-friendly policies.

Mbanc’s data supports this. There has been a 10.5% increase in new home listings year-over-year (YOY) in the area in October 2023. Condo active listings were up 36%, family active listings up 4% and average sales price for single family homes was up 4.3% YOY. Overall, in 2024, experts expect further growth in the South Florida housing market, as pent-up demand materializes amidst anticipated interest rate drops.

Which Areas to Invest in South Florida? 

A lot depends on what you are after. The advice, as always, is to know and stick to your investment strategy and do your research.

If you want to reach a premium clientele, go for the prestige, glamor and a thriving nightlife scene in Miami and Fort Lauderdale. These areas tend to attract tourists and short-term renters, so an investment into an Airbnb rental could be a profitable investment opportunity.

If your target audience is families and your investment goals include long-term rentals, Palm Beach and Boca Raton tend to attract this audience. In Boca Raton, in particular, it’s common for families to opt for long-term rentals before they decide to settle in the area.

Different areas have different investment opportunities in terms of the property types. In general, multi-family 2-4 units are popular in South Florida. As a result, their inventory is limited, and they tend to be expensive. Single family homes, condos and a new type of real estate—condo hotels are alternative types of properties available for investment, as well as high-value, luxury homes.

What Is Your Investment Strategy? 

According to Mayer, real estate investment becomes a numbers game during the housing market slowdown. Investors need a clear long-term strategy and strong understanding of the business case.

What is your real estate investment strategy—is your priority long-term appreciation or short-term rental income? In the environment of high interest rates, a long-term approach is strategically the best bet.

Another strategic consideration is which level of risk you are comfortable with—premium versus up-and-coming areas. Premium areas are a relatively safe, long-term investment, but a larger investment is required. At the same time, while being higher risk, up-and-coming areas, such as Delray beach in Palm Beach, have more affordable options.

At Mbanc, we have years of experience in South Florida, proprietary knowledge and tools to help you invest in the area successfully. Contact us today, online or over the phone, to speak with one of our experienced mortgage experts about your goals and requirements.

DSCR Loans—a Creative Financing Solution 

DSCR loans are an effective financing solution for real estate investors in South Florida. This type of loan is designed for investors who want to qualify based on the cash flow generated by their investment property rather than traditional tax returns, pay stubs, and W2s. 

DSCR loans can be used to finance the purchase of a property or to refinance an existing investment property loan. DSCR loans require the least amount of paperwork of any mortgages, are easier to qualify than conventional mortgages and are the fastest program to close, making them ideal for investors who need immediate access to capital. 

For example, these are the highlights of the Mbanc’s DSCR loan program: 

  • Investment properties only. Short-term rentals, such as Airbnb or VRBO, are eligible. 
  • Purchases up to $3.5 Million. Cash out refinances up to $3 Million. 
  • Single family homes, condos, condotels, 2-4-unit and 5-8-unit properties are eligible. 
  • Qualify using property rental income or proposed rental income. No tax returns, W-2s, or pay stubs required. 
  • The initial 10-year interest-only period for mortgage terms of 30 and 40 years. 
  • Max LTV up to 80% (minimum 20% downpayment). 

Mortgage lenders and brokers have different programs and terms. Do your research and read customer reviews. Consider working with an experienced lender specializing in DSCR loans, such as Mbanc. We are the premier direct lender and, unlike brokers, the bank, meaning we can offer more flexible terms, qualification criteria, and application process. Our average time to close is just 17 days. 

Why Mbanc?

Once you are clear on your investment goals, strategy and location, assemble a team of experts with local knowledge to help you identify the right financing and close without unnecessary delays. This includes a reputable local realtor and an experienced lender with expertise in DCSR loans who understand your goals and strategy.  

Mbanc has a strong presence and expertise in South Florida and can give you access to local insight and the network of local real estate professionals. Contact us today—online or over the phone—to discuss your plans and requirements. 
Getting a mortgage with Mbanc is different compared to other lenders. At the outset, you are working with knowledgeable, understanding, expert loan officers to find the best solutions for your mortgage needs. Our average time to close is just 17 days. Excellent client reviews on Google are a testament to our customer service.

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