COMMERCIAL LENDING
Investment Property
Financing Solutions
Whether you're buying your first rental or scaling a portfolio, we have lending solutions that fit how investors actually operate. Qualify on property income, not just personal finances.
Investment Loan Options
Different strategies need different financing. Here's what's available for real estate investors.
DSCR Loans
Debt Service Coverage Ratio
Qualify based on the property's rental income, not your personal income. Perfect for investors with complex tax returns or multiple properties.
- ✓No personal income verification
- ✓DSCR as low as 1.0 (break-even)
- ✓20-25% down payment typical
- ✓Credit score 660-680+ required
Multi-Family (5+ Units)
Apartment building financing
Commercial loans for apartment buildings and large multi-family properties. Evaluated primarily on property income and potential.
- ✓Based on Net Operating Income (NOI)
- ✓Amortization 20-30 years
- ✓Balloon terms common (5-10 years)
- ✓Recourse and non-recourse options
Mixed-Use Properties
Commercial + residential combo
Financing for properties with both commercial (retail, office) and residential components. Common in urban areas and main street locations.
- ✓Residential income helps qualification
- ✓Flexible use requirements
- ✓Often owner-occupied options
- ✓SBA loans may apply
Fix & Flip / Bridge Loans
Short-term investment financing
Short-term financing for property acquisition, renovation, and resale. Designed for experienced investors with a clear exit strategy.
- ✓12-24 month terms typical
- ✓Interest-only payments
- ✓Based on ARV (After Repair Value)
- ✓Fast closings possible
Understanding DSCR Loans
The most popular financing option for serious real estate investors.
How DSCR Works
DSCR loans evaluate the property, not you. If the rental income covers the mortgage payment with room to spare, you qualify. Your personal income, job history, and tax returns are essentially irrelevant.
Example: Property rents for $2,000/month. PITIA (Principal, Interest, Taxes, Insurance, Association) is $1,600/month. DSCR = $2,000 ÷ $1,600 = 1.25. This property qualifies!
1.0
Minimum DSCR
Break-even (rent = payment)
1.25
Ideal DSCR
25% cushion for best rates
0.75
No-Ratio Option
Higher rate, max flexibility
DSCR Loan Benefits
- No personal income verification required
- No limit on number of financed properties
- Close in LLC or personal name
- Tax returns not required
- Interest-only options available
- Fast closings (often 2-3 weeks)
Key Metrics Every Investor Should Know
Understanding these numbers helps you evaluate deals and communicate with lenders.
DSCR (Debt Service Coverage Ratio)
The ratio of a property's net operating income to its debt payments. A DSCR of 1.25 means the property generates 25% more income than needed to cover the mortgage.
Example: If monthly rent is $2,500 and the mortgage payment is $2,000, DSCR = 2,500 ÷ 2,000 = 1.25
Cap Rate (Capitalization Rate)
Annual net operating income divided by property value. Helps compare investment returns across properties regardless of price.
Example: A $500,000 property generating $40,000 annual NOI has a cap rate of 8%.
NOI (Net Operating Income)
Gross rental income minus operating expenses (taxes, insurance, maintenance, management). Does NOT include mortgage payments.
Example: $36,000 annual rent - $12,000 expenses = $24,000 NOI
LTV (Loan-to-Value)
The loan amount as a percentage of property value. Commercial loans typically max at 75-80% LTV, requiring 20-25% down.
Example: Borrowing $400,000 on a $500,000 property = 80% LTV
Which Investor Are You?
Your situation determines the best financing path. Find yourself below.
First-Time Investor
Starting your real estate investment journey with your first rental property.
Recommendation: Start with a conventional investment property loan (1-4 units) or house-hack with an owner-occupied multi-family.
Scaling Investor
You have a few properties and want to grow your portfolio without hitting conventional loan limits.
Recommendation: DSCR loans let you scale beyond the 10-loan conventional limit. Each property qualifies on its own income.
Self-Employed Investor
Your tax returns show low income due to write-offs, making conventional qualification difficult.
Recommendation: DSCR and bank statement loans qualify on property income or deposits, not tax returns.
Commercial Investor
You're ready for larger deals: apartment buildings, retail, office, or mixed-use.
Recommendation: Commercial loans with flexible terms, potentially SBA options for owner-occupied properties.
Building Investment Properties?
TRULUX Build constructs rental properties and multi-family buildings. Combine our construction expertise with investment financing for a complete solution.
Investment Lending FAQs
Common questions from real estate investors.
DSCR (Debt Service Coverage Ratio) loans qualify borrowers based on rental property income rather than personal income. The lender calculates whether the property's rent covers the mortgage payment (and then some). A DSCR of 1.0 means break-even; 1.25 means 25% cushion. This makes qualification easier for investors with complex finances.
Investment property loans typically require 20-25% down. Some programs allow 15% down for strong borrowers. Commercial properties often require 25-30% down. The more you put down, the better your rate and terms. Unlike primary residences, there are no zero-down options for pure investment properties.
Yes! For conventional loans, lenders typically count 75% of rental income (to account for vacancies). For DSCR loans, the property's actual or projected rent is the primary qualification factor. Having existing rental income on your tax returns strengthens any mortgage application.
Residential loans (1-4 units) are standardized, with 30-year fixed rates and consumer protections. Commercial loans (5+ units, retail, office) are more flexible but have shorter terms (5-10 year balloons), higher rates, and are based primarily on property income. The underwriting process is also more intensive for commercial.
Conventional lenders typically cap at 10 financed properties. Beyond that, DSCR loans, portfolio lenders, and commercial loans have no such limits. Your ability to scale depends on cash flow, equity, and liquidity—not an arbitrary property count.
You don't need an LLC to get financing—most loans are in personal names. However, many investors use LLCs for liability protection and can transfer ownership after closing (check your loan documents first). Some commercial loans can close directly in an LLC or entity name.
Conventional investment loans typically require 620-680+ with better rates at 720+. DSCR loans usually need 660-680+. Commercial loans are more flexible on personal credit if the property fundamentals are strong. Higher scores always mean better rates and terms.
Absolutely. Rate-and-term refinances can lower your payment or shorten your term. Cash-out refinances let you tap equity for more investments. Many investors use the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) to recycle capital into new deals.
Ready to grow your portfolio?
Let's find the right financing for your next investment property.
NEXT STEP
Ready to Find Your Property?
Now that your financing is in place, our real estate team is ready to help you find the perfect home.