Which Investment Loan Is Right for You?
Real estate can be one of the most powerful ways to build long-term wealth—but choosing the right type of investment loan is key to your success. From buying your first rental property to expanding a large portfolio, understanding your financing options helps you make smarter, more profitable moves.
Let’s break down the most common types of investment loans and how to decide which one fits your goals.
Conventional Investment Loans
Conventional loans are a go-to option for many investors. They’re backed by Fannie Mae and Freddie Mac and work much like traditional home loans—but with slightly stricter requirements.
Best for: Long-term investors buying and holding rental properties
Benefits include:
Competitive interest rates
Fixed or adjustable terms
Options for 1–4 unit properties
The ability to remove PMI once you reach 20% equity
Keep in mind that conventional investment loans usually require 15–25% down and a solid credit profile.
DSCR Loans (Debt Service Coverage Ratio)
If you’re self-employed or your income doesn’t fit neatly on paper, DSCR loans can be a game-changer. Instead of qualifying based on personal income, these loans focus on the property’s cash flow.
Best for: Investors who rely on rental income or own multiple properties
Key advantages:
No tax returns or W-2s required
Qualify based on property income
Can close in your business or LLC name
Works for both short-term and long-term rentals
If your rental property’s income covers its expenses, you could qualify—even with nontraditional income sources.
Portfolio Loans
Portfolio loans are designed for seasoned investors managing multiple properties. Instead of juggling separate mortgages, you can combine them under one loan with flexible terms.
Best for: Experienced investors with larger portfolios
Why investors choose them:
Finance multiple properties at once
Easier management and simplified payments
Lenders can offer more customized terms
Because portfolio loans are kept “in-house” by the lender, they’re often more flexible than conventional options.
Fix-and-Flip Loans
If your strategy focuses on buying, renovating, and reselling homes quickly, a fix-and-flip loan offers short-term financing to help make it happen.
Best for: Real estate investors flipping properties for profit
Features include:
Short-term, interest-only payments
Funding for both purchase and renovation costs
Fast approvals to help you compete in tight markets
These loans are ideal if you plan to renovate and sell within 6–12 months rather than hold long-term.
Choosing the Right Loan
When deciding which loan fits your investment goals, consider:
Your strategy: Are you flipping, renting, or holding long-term?
Your experience: Newer investors might prefer conventional loans; seasoned pros may benefit from portfolio or DSCR options.
Your income situation: If your personal income isn’t traditional, a DSCR loan could open more doors.
At Chris Lewis. | Home Loans, we specialize in helping investors understand their options and structure financing that aligns with their long-term goals. Whether you’re buying your first rental or expanding a thriving portfolio, we’ll guide you through every step with clarity and confidence.