Real Estate Investor Financing Guide

Real estate investor financing is one of the most specialized markets in U.S. lending, with completely different products from conventional homeowner mortgages. The key shift: investor loans qualify on the property's income (DSCR, rent rolls, NOI) rather than the borrower's W-2 income. This unlocks investing strategies (BRRRR, portfolio scaling, STR) that conventional lenders can't underwrite. This guide covers each product, when it fits, and the specialty lenders that actually do this well. For broader context see commercial real estate loans and fix-and-flip financing.

Financing Products by Investor Strategy

DSCR Loan Deep Dive

DSCR (Debt Service Coverage Ratio) loans changed real estate investing because they qualify on the property's rental income rather than the borrower's W-2 income. Typical structure:

• DSCR formula: monthly rent / monthly PITIA (principal + interest + taxes + insurance + association). 1.0 means rent exactly covers debt service; 1.25+ is the typical lender minimum for best pricing.
• Down payment: 20-25% on 1-4 unit; 25-30% on 5-10 unit; sometimes 15% on cash-out refis with strong DSCR.
• FICO: 660-700+ minimum; 740+ unlocks best rates.
• Reserves: 6-12 months of PITIA in liquid reserves.
• Loan size: $75K-$3M typical, up to $5M with strong file.
• Term: 30-year fixed common; 5/1, 7/1, 10/1 ARM available.
• Rate: 50-150 bp above conventional rental loans (because no income docs).

DSCR specialty lenders: Visio Lending, Lima One Capital, Kiavi, Easy Street Capital, Velocity Mortgage Capital, RCN Capital. Conventional banks rarely write DSCR; this is non-QM specialty territory.

Hard Money for Fix-and-Flip

Hard money lenders advance against the ARV (after-repair value), enabling investors to buy and rehab properties without needing the full purchase price + rehab cost in cash. Structure:

• Loan-to-cost (LTC): 80-90% of purchase + 100% of rehab
• Loan-to-ARV: 70-80% of after-repair value (the binding constraint)
• Rate: 9-13% on a typical fix-and-flip loan
• Points: 1-3 points at close
• Term: 6-18 months
• Rehab draws: typical structure pays rehab in 3-5 draws against contractor invoices and inspections
• Exit strategy required: lender wants either a sale plan or a refinance plan documented at origination

Hard money lenders: Kiavi, Lima One Capital, RCN Capital, Anchor Loans, Visio Lending, plus thousands of regional/local hard money operators. Local lenders sometimes price competitively because they know the market.

BRRRR: Buy, Rehab, Rent, Refinance, Repeat

BRRRR combines hard money and DSCR into a repeatable scaling strategy:

1. Buy: hard money loan on a distressed property at 70-80% of ARV minus rehab
2. Rehab: contractor renovates over 60-90 days; rehab draws fund the work
3. Rent: lease the rehabbed property at market rent
4. Refinance: cash-out refi into a DSCR loan based on the new appraised value (which reflects the rehab and stabilization). Pulls out original cash + sometimes more
5. Repeat: roll the freed-up cash into the next deal

The economics work when ARV growth from rehab covers acquisition + rehab cost + holding costs + transaction costs at refi. Most BRRRR investors target an end LTV around 70-75% on the DSCR refi.

Portfolio (Blanket) Loans

Once an investor accumulates 5+ properties, managing 5+ separate Fannie loans becomes burdensome. Portfolio loans bundle 5-25+ properties on one note:

• One closing, one payment — consolidated administration
• Sometimes non-recourse at scale (above ~$2M aggregate)
• Cross-collateralized — all properties secure the loan
• 5-10 year terms typical with balloon
• Rates similar to or slightly higher than equivalent individual conventional loans

Specialty portfolio lenders: Lima One Capital, Visio Lending, CoreVest, Velocity Mortgage Capital, RCN Capital.

Commercial Multifamily (5+ Units)

5+ unit properties graduate to commercial multifamily financing — agency (Fannie/Freddie), CMBS, life company, or bank balance-sheet lenders:

• Fannie Mae Small Loans ($1M-$9M): 65-80% LTV, 5-10 year terms, 30-year amortization, often non-recourse
• Freddie Mac Small Balance Loan (SBL): similar to Fannie Small, sometimes more aggressive in select MSAs
• CMBS ($2M+): non-recourse, 10-year fixed common, securitization-driven
• Bank balance-sheet: more flexible underwriting, often recourse

Specialty multifamily brokers: Greystar, Walker & Dunlop, Berkadia, Marcus & Millichap Capital, Newmark Multifamily.

Short-Term Rental Financing

Airbnb/VRBO short-term rentals require specialized DSCR lenders that qualify on projected STR income (using AirDNA or Mashvisor data) rather than long-term rental comps. STR-specific DSCR lenders include Visio Lending (STR product), Easy Street Capital, RCN Capital STR. STR financing has stricter underwriting because of regulatory risk (cities limiting STRs) and revenue volatility.

Specialty REI Lender List

• DSCR: Visio Lending, Lima One Capital, Kiavi, Easy Street Capital, Velocity Mortgage Capital, RCN Capital
• Hard money: Kiavi, Lima One, RCN Capital, Anchor Loans, plus thousands of local operators
• Portfolio: Lima One Capital, Visio Lending, CoreVest, Velocity, RCN
• Multifamily: Greystar, Walker & Dunlop, Berkadia, Marcus & Millichap Capital
• STR: Visio Lending STR, Easy Street Capital, RCN Capital STR

Next Step

Whatever your real estate investing strategy, specialty REI lenders dramatically outperform conventional retail mortgage banks. Get matched with a real estate investor lender.