You're spot-on about banks and credit lines being unpredictable. I've seen plenty of clients get burned by relying too heavily on HELOCs or credit lines as their safety nets—banks can (and do) pull the rug out at the worst possible moments. Your cousin's experience isn't uncommon, unfortunately.
From my experience, lenders definitely care about both cash reserves and property cash flow, but if I had to pick one that's slightly more critical, I'd lean toward property cash flow numbers. DSCR loans are fundamentally based on the property's ability to cover its own debt service. Lenders want reassurance that the investment itself is solid and self-sustaining. That said, having healthy cash reserves can tip the scales in your favor, especially if you're borderline on the DSCR ratio or if market conditions are shaky.
Bottom line: keep your property's numbers strong, but don't underestimate the comfort lenders get from seeing actual cash sitting in your account. It can make a noticeable difference in loan terms and approvals.
"banks can (and do) pull the rug out at the worst possible moments."
Couldn't agree more—I've seen it happen firsthand during the '08 crash. Clients who thought their HELOCs were rock-solid suddenly found themselves scrambling. Cash flow definitely matters, but I've noticed lenders tightening up even more lately on reserves, especially with market volatility creeping in... Curious if anyone's noticed lenders shifting their DSCR thresholds recently or becoming pickier about certain property types?
I've definitely noticed lenders getting pickier lately, especially with DSCR thresholds. A client of mine recently had a deal stall out because the lender suddenly decided the property's short-term rental income wasn't "stable" enough—even though it had solid bookings for months ahead. Seems like they're getting cautious about anything remotely unconventional or seasonal.
And speaking of reserves, I've seen lenders quietly bumping up how much they want to see sitting in the bank, even on straightforward deals. Makes you wonder if they're bracing for something or just being extra cautious after getting burned before...
Has anyone else run into lenders suddenly questioning rental comps or being skeptical about projected rents? Feels like they're double-checking everything these days.
"Seems like they're getting cautious about anything remotely unconventional or seasonal."
Yeah, I've noticed the same thing lately. Had a lender recently push back hard on projected rents, even though we had solid comps. Ended up providing extra documentation—like actual lease agreements from similar properties—to ease their concerns. Honestly, having detailed backup ready upfront seems to help smooth things over these days... lenders are definitely tightening up, but being proactive can save you some headaches.
"Honestly, having detailed backup ready upfront seems to help smooth things over these days..."
True, but sometimes even detailed docs won't cut it if the lender's already skeptical. I've seen lenders dismiss solid comps outright. Might be worth shopping around instead of jumping through endless hoops...
