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Investor Financing

Your complete guide to financing investment and rental properties. This hub covers conventional investor loans, DSCR programs, hard money lending, portfolio loans, LLC ownership structures, and strategies for scaling a real estate portfolio with leverage.

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Investment Property Mortgage Rules Foundational rules for financing rental and investment properties. DSCR Loans Explained Qualify based on property cash flow, not personal income. Multi-Unit Property Financing (2-4 Units) Financing duplexes, triplexes, and fourplexes as an owner-occupant or investor.

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1031 Exchange and Mortgage Implications A 1031 exchange allows real estate investors to defer capital gains taxes by reinvesting sale proceeds into a... Blanket Loans for Multiple Properties A blanket loan is a single mortgage that finances two or more properties under one note, one payment,... Bridge Loans for Real Estate Investors Bridge loans are short-term financing instruments that allow real estate investors to access capital quickly when timing is... Cash-Out Refinance on Investment Property A cash-out refinance on an investment property replaces the existing mortgage with a larger loan, delivering the equity... DSCR Loans Explained DSCR (Debt Service Coverage Ratio) loans are non-QM mortgages for investment properties that qualify the loan based on... Fix-and-Flip Financing Fix-and-flip financing encompasses the short-term loan products used to acquire and renovate distressed properties for resale, including hard... Hard Money Loans for Real Estate Investors Hard money loans are short-term, asset-based loans provided by private lenders that prioritize the property's value and the... House Hacking Strategies and Financing House hacking is a strategy where the owner lives in one unit of a multi-family property or one... How Many Mortgages Can You Have? The 10-Property Rule Explained There is no legal limit on how many mortgages one person can hold. Fannie Mae and Freddie Mac... Investment Property Mortgage Rules Investment property mortgage rules encompass the specific underwriting requirements that apply when financing non-owner-occupied real estate through conventional... LLC Ownership and Mortgage Qualification LLC ownership and mortgage qualification addresses the interaction between holding investment property in a limited liability company and... Multi-Unit Property Financing (2-4 Units) Multi-unit property financing covers the mortgage rules, down payment requirements, rental income treatment, and appraisal considerations for properties... Portfolio Loans for Real Estate Investors Portfolio loans are mortgage products retained on the originating lender's balance sheet rather than sold to the secondary... Rental Property Down Payment Requirements Rental property down payment requirements are significantly higher than primary residence requirements, Per Fannie Mae and Freddie Mac... Scaling a Rental Portfolio with Financing Scaling a rental portfolio with financing involves navigating the transition from conventional conforming loans (limited to 10 financed... Short-Term Rental (Airbnb) Income for Mortgages Short-term rental (Airbnb) income for mortgages refers to the use of revenue from short-term guest rentals to qualify...

Frequently Asked Questions

How much do I need to put down on an investment property?

Conventional investment property loans typically require 15-25% down depending on the number of units and whether it is a single-family or multi-unit property. DSCR and portfolio loans may have different requirements.

What is a DSCR loan?

A Debt Service Coverage Ratio loan qualifies based on the property rental income relative to the mortgage payment rather than the borrower personal income. A DSCR of 1.0 or higher means the rent covers the payment.

Can I use rental income to qualify for an investment property mortgage?

Yes. Conventional loans allow 75% of documented rental income to offset the mortgage payment. DSCR loans use 100% of projected rent. The specific rules depend on whether the property has existing leases or uses market rent estimates.

Can I buy investment property in an LLC?

Most conventional and government loans require the borrower to hold title personally. DSCR loans, portfolio loans, and commercial loans often allow LLC ownership. Some borrowers purchase personally and transfer to an LLC after closing, though this may trigger a due-on-sale clause.

What is a hard money loan?

A hard money loan is a short-term, asset-based loan funded by private investors. It is used primarily for fix-and-flip projects or bridge financing. Rates are higher (typically 9-14%) and terms are short (6-24 months), but approval is faster and based primarily on property value.

How many investment properties can I finance?

Fannie Mae allows up to 10 financed properties per borrower. Beyond that, portfolio lenders and DSCR programs can finance additional properties. Each additional property typically requires more reserves.

What is a 1031 exchange?

A 1031 exchange allows investors to defer capital gains taxes by reinvesting proceeds from a property sale into a like-kind replacement property within specific timeframes (45 days to identify, 180 days to close). The exchange has specific mortgage and equity requirements.