🏦Financing Options for Real Estate Investing
One of the biggest questions I get is: “How do I finance my first (or next) deal?” Here are 3 common financing options to consider: 🏠 Fix & Flip Loans • Best for: Investors doing renovations with the intent to sell quickly • Loan amount: Usually covers purchase + rehab costs • Terms: Short-term (6–18 months), higher interest rates (8–12%+), points up front • Example: Buy a distressed property for $120K, borrow rehab funds of $40K, then sell for $220K. The loan is paid back at closing. 🏦 DSCR Loans (Debt Service Coverage Ratio) • Best for: Long-term rentals or Airbnbs • How it works: Approval is based on the property’s rental income covering the mortgage, not your personal income • Terms: 30-year fixed, interest rates typically 7–9%• Example: Buy a duplex where rents total $2,000/mo. If your mortgage is $1,400/mo, you qualify because rent > debt 💰 Conventional Loans • Best for: Investors with good credit, steady W2 or self-employed income, and wanting lower rates • Terms: 15–30 year fixed, lowest interest rates, down payment often 15–25% for investment property • Example: Buy a single-family rental at $200K with 20% down ($40K). Lock in a 30-year mortgage at ~6% ✅ Key takeaway: Each strategy fits a different investing style. If you’re flipping, fix & flip loans give speed. If you’re building rental cash flow, DSCR loans let the property qualify itself. If you want long-term stability and the lowest rate, conventional is the way to go. Looking to move forward with financing? Comment below & we'll schedule a call to talk more about the best options for you! - chat soon🫡 What is your biggest struggle with financing right now?