Anyone scaling from 5 to 20+ rental doors using DSCR loans exclusively?

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Anyone scaling from 5 to 20+ rental doors using DSCR loans exclusively?

Steven WesolowskiPro Member
Realtor · San Antonio, TX · Member since 2023 · 276 posts · 42 votes

I'm curious how many of you have successfully scaled your rental portfolios from just a handful of doors (let's say around 5) up to 20+ units while relying almost entirely on DSCR loans.

DSCR financing has become a go-to option for many investors because it focuses on the property's cash flow rather than your personal W-2 income, which makes it much easier to qualify as your portfolio grows. However, with interest rates still elevated in 2026, stricter debt service coverage requirements from many lenders, and rising insurance and property tax costs eating into cash flow, I wonder how realistic it is to keep scaling exclusively with DSCR.

For those of you who have done it:

  • What DSCR ratio are lenders actually requiring right now to keep approving new loans?
  • Have you run into any major roadblocks once you crossed 10–15 doors (seasoning requirements, loan limits, or lender pullback)?
  • How are you structuring your deals to still hit strong cash-on-cash returns after DSCR loan payments, especially in markets where rents haven't kept pace with expenses?

When I am finding off-market buy-and-hold properties in the San Antonio area, I have noticed folks are using DSCR loans to scale in Texas because of the landlord-friendly environment and steady job growth in military, healthcare, and manufacturing. I'm seeing mixed results depending on how conservatively they underwrite.

Would love to hear real experiences, both the wins and the challenges, from those who have scaled using mostly or only DSCR loans.

What tips would you give someone who is currently sitting at 5–8 doors and wants to push toward 20+ this year?

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Stacy RaskinBusiness Member
Lender · Member since 2022 · 1k+ posts · 508 votes
5mo

Yes, there are investors using DSCR loans to go over from under 5 doors to 20+ doors. I have worked with clients who have done it in one year or more depending on how much money they have to invest.

It's possible to do with a DSCR 1 ratio which means there's enough rent to cover expenses. For an easy Math example that means a $1,000 or rent that pays for exceeds the new mortgage, property taxes and insurance (and HOA if applicable). There are no ratio DSCR loans where the expenses exceed the actual or projected rent but the rates will be higher and the LTV will be lower as a higher risk loan for the lender.

As long as an investor keeps making his mortgage payments, I haven't seen any limits on the amount of DSCR loans.

To structure a deal to still cash flow, it might mean putting more money down if a purchase if the rents have gone down in the area. I have seen clients able to cash flow in the right market if putting down 20% of more which is what is usually required for a DSCR loan. There are 15% down programs if the credit score is high enough but putting less down impacts the rate with the rate going up. That makes a DSCR 1 ratio harder to achieve.

Rates are lower than they were three years ago when investors were successfully using this strategy. It's important to invest in a cash flowing market. Some markets are more appreciation markets, some are more cash flow and some are both or along the spectrum. 

Tips for expanding from 5-8 doors to 20+ doors for this year is keep or build your credit to be as strong as it can be, save money for down payments, and buy in areas that ideally will cash flow. 

More on DSCR loans: As mentioned in the original post, DSCR loans won't use your income to underwrite the loan. DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

Here's a bit more in detail about how rates are calculated for DSCR loans:

1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

I've included an example below to help illustrate this.

So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

See example below:

DSCR < 1

Principal + Interest = $1,700

Taxes = $350, Insurance = $100, Association Dues = $50

Total PITIA = $2200

Rent = $2000

DSCR = Rent/PITIA = 2000/2200 = 0.91

Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

DSCR >1

Principal + Interest = $1,500

Taxes = $250, Insurance = $100, Association Dues = $25

Total PITIA = $1875 Rent = $2300

DSCR = Rent/PITIA = 2300/1875 = 1.23

If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals. Happy to connect to discuss further.

[email protected]818-770-0340
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  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 508 votes
    5mo

    Yes, there are investors using DSCR loans to go over from under 5 doors to 20+ doors. I have worked with clients who have done it in one year or more depending on how much money they have to invest.

    It's possible to do with a DSCR 1 ratio which means there's enough rent to cover expenses. For an easy Math example that means a $1,000 or rent that pays for exceeds the new mortgage, property taxes and insurance (and HOA if applicable). There are no ratio DSCR loans where the expenses exceed the actual or projected rent but the rates will be higher and the LTV will be lower as a higher risk loan for the lender.

    As long as an investor keeps making his mortgage payments, I haven't seen any limits on the amount of DSCR loans.

    To structure a deal to still cash flow, it might mean putting more money down if a purchase if the rents have gone down in the area. I have seen clients able to cash flow in the right market if putting down 20% of more which is what is usually required for a DSCR loan. There are 15% down programs if the credit score is high enough but putting less down impacts the rate with the rate going up. That makes a DSCR 1 ratio harder to achieve.

    Rates are lower than they were three years ago when investors were successfully using this strategy. It's important to invest in a cash flowing market. Some markets are more appreciation markets, some are more cash flow and some are both or along the spectrum. 

    Tips for expanding from 5-8 doors to 20+ doors for this year is keep or build your credit to be as strong as it can be, save money for down payments, and buy in areas that ideally will cash flow. 

    More on DSCR loans: As mentioned in the original post, DSCR loans won't use your income to underwrite the loan. DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

    Here's a bit more in detail about how rates are calculated for DSCR loans:

    1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

    2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

    3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

    4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

    I've included an example below to help illustrate this.

    So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

    See example below:

    DSCR < 1

    Principal + Interest = $1,700

    Taxes = $350, Insurance = $100, Association Dues = $50

    Total PITIA = $2200

    Rent = $2000

    DSCR = Rent/PITIA = 2000/2200 = 0.91

    Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

    DSCR >1

    Principal + Interest = $1,500

    Taxes = $250, Insurance = $100, Association Dues = $25

    Total PITIA = $1875 Rent = $2300

    DSCR = Rent/PITIA = 2300/1875 = 1.23

    If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

    DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals. Happy to connect to discuss further.

    [email protected]818-770-0340
    Bright Skyline518 Reviews
    WebsiteView Page
    4Reply
    • Mike GrudzienPro Member
      Lender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
      5mo
      Quote from @Stacy Raskin:

      Yes, there are investors using DSCR loans to go over from under 5 doors to 20+ doors. I have worked with clients who have done it in one year or more depending on how much money they have to invest.

      It's possible to do with a DSCR 1 ratio which means there's enough rent to cover expenses. For an easy Math example that means a $1,000 or rent that pays for exceeds the new mortgage, property taxes and insurance (and HOA if applicable). There are no ratio DSCR loans where the expenses exceed the actual or projected rent but the rates will be higher and the LTV will be lower as a higher risk loan for the lender.

      As long as an investor keeps making his mortgage payments, I haven't seen any limits on the amount of DSCR loans.

      To structure a deal to still cash flow, it might mean putting more money down if a purchase if the rents have gone down in the area. I have seen clients able to cash flow in the right market if putting down 20% of more which is what is usually required for a DSCR loan. There are 15% down programs if the credit score is high enough but putting less down impacts the rate with the rate going up. That makes a DSCR 1 ratio harder to achieve.

      Rates are lower than they were three years ago when investors were successfully using this strategy. It's important to invest in a cash flowing market. Some markets are more appreciation markets, some are more cash flow and some are both or along the spectrum. 

      Tips for expanding from 5-8 doors to 20+ doors for this year is keep or build your credit to be as strong as it can be, save money for down payments, and buy in areas that ideally will cash flow. 

      More on DSCR loans: As mentioned in the original post, DSCR loans won't use your income to underwrite the loan. DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

      Here's a bit more in detail about how rates are calculated for DSCR loans:

      1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

      2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

      3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

      4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

      I've included an example below to help illustrate this.

      So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

      See example below:

      DSCR < 1

      Principal + Interest = $1,700

      Taxes = $350, Insurance = $100, Association Dues = $50

      Total PITIA = $2200

      Rent = $2000

      DSCR = Rent/PITIA = 2000/2200 = 0.91

      Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

      DSCR >1

      Principal + Interest = $1,500

      Taxes = $250, Insurance = $100, Association Dues = $25

      Total PITIA = $1875 Rent = $2300

      DSCR = Rent/PITIA = 2300/1875 = 1.23

      If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

      DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals. Happy to connect to discuss further.


       Great analysis Stacy!

      0Reply
    • Stacy RaskinBusiness Member
      Lender · Member since 2022 · 1k+ posts · 508 votes
      5mo
      Quote from @Mike Grudzien:
      Quote from @Stacy Raskin:

      Yes, there are investors using DSCR loans to go over from under 5 doors to 20+ doors. I have worked with clients who have done it in one year or more depending on how much money they have to invest.

      It's possible to do with a DSCR 1 ratio which means there's enough rent to cover expenses. For an easy Math example that means a $1,000 or rent that pays for exceeds the new mortgage, property taxes and insurance (and HOA if applicable). There are no ratio DSCR loans where the expenses exceed the actual or projected rent but the rates will be higher and the LTV will be lower as a higher risk loan for the lender.

      As long as an investor keeps making his mortgage payments, I haven't seen any limits on the amount of DSCR loans.

      To structure a deal to still cash flow, it might mean putting more money down if a purchase if the rents have gone down in the area. I have seen clients able to cash flow in the right market if putting down 20% of more which is what is usually required for a DSCR loan. There are 15% down programs if the credit score is high enough but putting less down impacts the rate with the rate going up. That makes a DSCR 1 ratio harder to achieve.

      Rates are lower than they were three years ago when investors were successfully using this strategy. It's important to invest in a cash flowing market. Some markets are more appreciation markets, some are more cash flow and some are both or along the spectrum. 

      Tips for expanding from 5-8 doors to 20+ doors for this year is keep or build your credit to be as strong as it can be, save money for down payments, and buy in areas that ideally will cash flow. 

      More on DSCR loans: As mentioned in the original post, DSCR loans won't use your income to underwrite the loan. DSCR loans are based off of down payment, credit score and either actual or market rents so it helps to supercharge an investor's real estate goals and net worth.

      Here's a bit more in detail about how rates are calculated for DSCR loans:

      1. Credit score- the higher the best. 760-780+ generally gets best pricing for investment property loans with most lenders. From there every 20 point increment affect pricing differently. So for example, a 761 credit score will be in the 760-779 credit category, then going down to 740-759 and so on.

      2. Loan to value ratio: The higher the loan to value ratio (LTV) is, pricing takes a hit. So your pricing will be higher for a 80% LTV loan than for a 60% LTV loan.

      3. Prepayment penalties- usually 1-5 year terms. The shorter the prepayment term has an impact on increasing the rate.

      4. Are you cash flowing the property? More on how that is calculated below. Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable). Many lenders will not do a DSCR loan unless cash flowing. If they will do a loan with less than 1, the pricing takes a hit. This criteria is for 1-4 and 5-8 unit programs.

      I've included an example below to help illustrate this.

      So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.

      See example below:

      DSCR < 1

      Principal + Interest = $1,700

      Taxes = $350, Insurance = $100, Association Dues = $50

      Total PITIA = $2200

      Rent = $2000

      DSCR = Rent/PITIA = 2000/2200 = 0.91

      Since the DSCR is 0.91, we know the expenses are greater than the income of the property.

      DSCR >1

      Principal + Interest = $1,500

      Taxes = $250, Insurance = $100, Association Dues = $25

      Total PITIA = $1875 Rent = $2300

      DSCR = Rent/PITIA = 2300/1875 = 1.23

      If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable). If a cash out refinance, many lenders will allow the cash out to satisfy the reserves requirement.

      DSCR lenders generally let you vest either individually or as an LLC. It's a great way to increase your net worth and these loans can also be used to pull cash out of a property as it appreciates allowing you to reinvest money into new deals. Happy to connect to discuss further.


       Great analysis Stacy!


       Thank you Mike!

      [email protected]818-770-0340
      Bright Skyline518 Reviews
      WebsiteView Page
      1Reply
  • Nate HerndonPro Member
    Lender · Springfield, MO · Member since 2023 · 277 posts · 195 votes
    5mo

    @Steven Wesolowski - all really good questions. I can speak from the perspective of what I see my investor clients doing, and what we decided to do as new investors ourselves. TO answer your primary question: Are investors exclusively scaling with DSCR loans? The short answer is yes, many are doing so.

    • What DSCR ratio are lenders actually requiring right now to keep approving new loans?

    The programs that I utilize for clients and myself are only requiring a 1.00+ DSCR as a minimum to get max leverage (80% purchase or rate/term refi, 75%-80% cash-out). There's also options that go to a 0.75-0.80 DSCR at a 5-10% LTV haircut.

    • Have you run into any major roadblocks once you crossed 10–15 doors (seasoning requirements, loan limits, or lender pullback)?

    Seasoning will only be a factor for the subject property that you're refinancing - not a consideration on a purchase, though. What you're referencing is an exposure limit that you can reach with some programs, but I've only got one program that has actually enforced that. If you ever happen to hit that exposure limit, that's the helpful part about utilizing a broker as a lending partner: you have many options to get a DSCR loan closed.

    For what it's worth, you generally need to reach $5MM-$10MM worth of loans with that specific lender before sniffing at an exposure limit - it is not based on your current portfolio size or your global DTI.

    • How are you structuring your deals to still hit strong cash-on-cash returns after DSCR loan payments, especially in markets where rents haven't kept pace with expenses?

    I think this is where the BRRRR method comes into play for many investors. In order to ensure that they have minimal cash in the deal and are given the opportunity to refinance based on what they need most (maximum cash-out, lowest monthly payment, etc.), the choose to BRRRR instead of buying turn-key. As for myself, we found a short-term rental that offered some better cash-on-cash opportunity than our local LTR market.

      [email protected]417-605-2196
      2Reply
    • Devin PetersonBusiness Member
      Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 667 votes
      5mo

      For someone sitting at 5-8 doors looking to push to 20+, my biggest piece of advice is to start structuring your entities and accounting now as if you already have 20. Put each property in its own LLC (or series LLC), maintain immaculate, separate bank accounts, and build a relationship with a lender who specializes in portfolio lending rather than just one-off DSCR transactions. The friction of closing loan number 18 is entirely dependent on how clean loans 1 through 17 look on paper. Best of luck with the scaling—Texas remains a very strong market for this strategy if the underwriting is disciplined.

      [email protected]860-538-3672
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    • Marcus Delgado
      Investor · Tampa, FL · Member since 2026 · 24 posts · 18 votes
      5mo

      Sitting at 8 doors right now, three of which are DSCR. The other four are conventional and one is seller financed. So not exclusively DSCR but it's been my go-to for the last few acquisitions and the plan going forward.

      The honest answer to "can you scale with DSCR only" is yes, but it's slower and more expensive than most people expect going in. My rates have been 7.5-8% on DSCR compared to the low 6s I was getting on conventional back in 2020-2021. That spread kills your cash flow margins fast, especially in markets where insurance and taxes are moving against you. Florida has been brutal for me on that front. I've had insurance quotes come back 30-40% higher than what I modeled, and that alone dropped a couple deals below a 1.0 DSCR.

      The lenders I've worked with all wanted 1.2 minimum, 75% LTV, and 740+ credit. I haven't hit a loan count ceiling since DSCR doesn't stack against your conventional slots, but the deals themselves are harder to make work right now. You're paying a premium for not having to qualify on income, and that premium eats your margin on thinner deals.

      What actually helped me was mixing financing types. Conventional for the first four when my DTI still worked, DSCR for the BRRRRs where I needed to refi out of hard money, and seller financing on one deal where the seller just wanted the monthly check. That one was 6.5% with a 5 year balloon, way better than any DSCR rate I've seen.

      If you're at 5-8 doors and want to push to 20, I'd focus less on the financing product and more on whether the deals actually pencil after real expense numbers. Get actual insurance quotes before you run full numbers. Check what the county will reassess the property at after purchase. Those two things have killed more of my deals than any rate issue.

      1Reply
    • Stacy RaskinBusiness Member
      Lender · Member since 2022 · 1k+ posts · 508 votes
      5mo

      Good points on the insurance quotes and checking to see if the county will reassess after purchase. As of the day of this posting, there are DSCR rates in the 6s with 20% down with over 740 credit. Maybe 7s if it's something that might impact the rate such as a lower credit score or higher LTV. Also, there are DSCR program options with a DSCR 1 ratio instead of DSCR 1.2 when the actual or projected rent is against the new mortgage (principal and interest), property taxes & insurance and HOA if applicable. So for easy Math, $1,000 rent covering the $1,000 of expenses instead of $1,200 of rent being needed to get the higher ratio. Happy to connect to discuss further.

      [email protected]818-770-0340
      Bright Skyline518 Reviews
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      0Reply
    • Deborah Van
      Member since 2026 · 36 posts · 21 votes
      5mo

      @Stacy Raskin I’m just getting started, so this thread is beyond my current level, but I wanted to ask for some clarification.

      You mentioned that DSCR loans use credit score in addition to the other criteria. As a Canadian with a strong credit score here, would I still be able to qualify for a DSCR loan in the U.S.? If not, are there any common workarounds or alternative approaches? I'm looking at single-family or small MF - 1 to 4 units to start my RE investing journey.

      0Reply
      • Stacy RaskinBusiness Member
        Lender · Member since 2022 · 1k+ posts · 508 votes
        5mo
        Quote from @Deborah Van:

        @Stacy Raskin I’m just getting started, so this thread is beyond my current level, but I wanted to ask for some clarification.

        You mentioned that DSCR loans use credit score in addition to the other criteria. As a Canadian with a strong credit score here, would I still be able to qualify for a DSCR loan in the U.S.? If not, are there any common workarounds or alternative approaches? I'm looking at single-family or small MF - 1 to 4 units to start my RE investing journey.

        You can qualify as a foreign national for a DSCR loan for 1-4 units if you don't live in the U.S. or have U.S. credit. There will be a higher down payment- how much depends on the loan program. Happy to connect to discuss further.
        [email protected]818-770-0340
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        1Reply
    • Deborah Van
      Member since 2026 · 36 posts · 21 votes
      5mo

      @Stacy Raskin Thank you!

      0Reply
    • Mitch Kowalski
      Flipper/Rehabber · Kansas City, MO · Member since 2026 · 11 posts · 7 votes
      5mo

      I'm at 8 doors and maybe 3 of them are on DSCR loans. The rest are a mix of sub-to and seller financed deals. So I can't really answer the 'exclusively' part because I wouldn't want to try it that way.

      Here's the thing with going all-in on DSCR for scaling. You're parking 20-25% down on every deal and paying rates in the high 7s right now. That works if you've got deep reserves or a high W2 recycling cash back in, but it slows you down fast. My Grandview property is a 3.2% VA loan I took sub-to. My duplex in KCK is seller financed at 5%. Both of those freed up capital that would've been locked in down payments if I'd gone DSCR on everything.

      I'm not saying DSCR is bad, I use it and it's great for the deals where the numbers work clean. But if your whole plan is 'find deal, put 25% down, DSCR loan, repeat' you're going to hit a capital wall somewhere around door 10-12 unless you've got outside money coming in. Mixing in creative deals when you find the right seller is what keeps things moving without waiting 6 months to save up another down payment.

      0Reply
    • Jermaine Fields
      Lender · Los Angeles CA · Member since 2026 · 3 posts · 1 vote
      4mo

      Mitch's take is solid and matches what I see from the lending side — the 20-25% down on every deal is the real constraint, not qualification.

      But there's a piece missing from the "capital wall at door 10-12" math: DSCR cash-out refis are the release valve. The investors scaling fastest aren't saving up new down payments — they're recycling equity. Buy under market or force appreciation, season it (most lenders want 3-6 months now), then cash-out refi on a DSCR loan based on the new appraised value and rent coverage. The down payment comes back out and goes into the next deal. That's the BRRRR engine, and DSCR is what makes it work without tax returns.

      On the sub-to and seller-financed deals — agreed they're great capital-wise. One thing worth knowing for that eventual exit: when you refi out of a sub-to, DSCR is usually the cleanest path since the qualification is the property, not the story of how you acquired it.

      So the playbook I see working: creative acquisition where the seller situation allows, DSCR for clean deals and as the refinance exit on everything. They're complementary tools, not competing ones.

      0Reply
    • Jake YuskaitisBusiness Member
      Lender · New Jersey, USA · Member since 2022 · 254 posts · 67 votes
      4mo

      i have many clients who do this. with commercial loans it really doesnt matter how many loans you take out.

      most lenders will look for bare minimum 1.0 DSCR but many have low/no ratio programs.


      better rates/terms will come with a 1.1 DSCR and then even better with a 1.25+ DSCR.


      structuring doesnt really matter here just purchse price and gross rent and having those align. two most important factors.

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    • Alyssa MarquezBusiness Member
      Real Estate Agent · San Antonio TX / Fort Lauderdale, FL · Member since 2023 · 120 posts · 29 votes
      2mo

      I think DSCR can work well for scaling, but I wouldn't rely on it exclusively. Once you're at 10–15+ doors, lender-specific limits, seasoning, reserves, and DSCR requirements can become bigger factors. I'd shop multiple lenders rather than assume one set of terms applies across the board.

      For San Antonio, I'd underwrite very conservatively given taxes, insurance, and current rents. If the deal only works with optimistic rent growth or appreciation, I'd pass. The investors who scale sustainably seem to focus on buying at the right basis and keeping enough reserves to handle the inevitable vacancies and repairs.

      0Reply
    • Alex BekezaBusiness Member
      Lender · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
      2mo

      Hey @Steven Wesolowski I've worked my way up to 29 doors so far over the last few years and DSCR loans played an enormous role in that because of having the most flexible guidelines when it comes to seasoning specifically. (hard to scale fast if you're beholden to long title seasoning guidelines). My income would have no problem qualifying but frankly I see no benefit in conventional loans as a BRRRR investor. Originating DSCR loans is also my full time career and I've helped hundreds of investors scale up. Some with upwards of 75 + DSCR loans.

      • What DSCR ratio are lenders actually requiring right now to keep approving new loans?  - All you need to do is clear a 1.0 with a super easy metric (Gross Rent/PITI).  That means if the lender has you at a 1.0 you're really negative in the real world because we're not counting a lot of real world costs like vacancy, management, utilities, etc.  
      • Have you run into any major roadblocks once you crossed 10–15 doors (seasoning requirements, loan limits, or lender pullback)?  I'm not aware of any DSCR lender who cares about having 10 or 15 loans out as long as you're making the payments.  Most lenders will have some type of internal guideline regarding maximum exposure to a single guarantor but it's pretty big.  Usually like $10M.  I recently had a guy eclipse that and all they asked for in additional requirements is that reserve requirement needs to include 1% of outstand balance owed on those loans. (I sure hope he's got $100k on him with over $10M in DSCR loans!) lol. 
      • How are you structuring your deals to still hit strong cash-on-cash returns after DSCR loan payments, especially in markets where rents haven't kept pace with expenses?  I think so much of it revolves around the fact that you make your money on the purchase.  It's not the same world as 2021 and so there's almost zero reason to get into bidding wars on these BRRRRs.  Instead you use the real world math to your advantage in negotiations.  For example, my offer is x because I have to do x amount in rehab in order to hit x amount in ARV.  I start with the basic premise that there is not a single listing on the MLS which isn't over priced right now.  That being said, you just have to find the sellers who are willing to come down to reality. My strategy is buying very deep and doing a pretty extensive reno so that the ARV is earned and you have a rental that's built to last without as much capex stuff popping up in the first few years. 
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    • James Driscoll
      Banker · MA · Member since 2026 · 120 posts · 33 votes
      2mo

      DSCR-only scaling is absolutely doable, but 'exclusively' is the word I'd push back on a little. In 31 years in the mortgage business I've seen investors get stuck because they painted themselves into a corner with one financing type. That said, DSCR is a genuinely good tool for what you're describing, so here's how I'd think through your questions.

      On DSCR ratios: most lenders right now want to see 1.20 to 1.25 as a floor, though some programs will go to 1.0 (break-even) at a higher rate or with more reserves. The spread between those two thresholds matters a lot in a market like San Antonio where insurance costs have crept up. If your deal barely clears 1.20 on paper, model it at 1.10 and see if it still makes sense before you close.

      On roadblocks past 10-15 doors: yes, you'll hit them. Seasoning is the most common one. Many DSCR lenders want 6-12 months of rental history on a property before they'll count the income at full market rent in their model. If you're buying and stabilizing fast, that gap can slow you down. Some lenders also cap total loans to one borrower, usually around 10, though others have no hard cap if reserves and DSCR are strong. The practical fix is to work with multiple lenders, not just one portfolio shop, so you're not building your whole strategy around one credit box.

      On cash-on-cash in this rate environment: the investors I've seen make it work are underwriting rent conservatively (think 90-93% economic occupancy, not 95%+) and baking in a realistic expense ratio before they even look at DSCR. If the numbers only work assuming perfect rent collection and flat insurance costs, the deal probably shouldn't close. The ones that hold up are priced right from the start, which in an off-market context like yours is actually an advantage you have over MLS buyers.

      One thing I'd add for someone at 5-8 doors looking to push to 20+: don't let DSCR be the only arrow in the quiver. Seller financing, subject-to, and even conventional investment property loans (up to 10 financed properties with Fannie/Freddie) can fill gaps when a DSCR deal's rate makes the math too tight. Mixing structures often gets you to 20+ faster than waiting for a DSCR loan on every single door.

      Jim Driscoll

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