Scaling Rentals Without Relying on Your 9-5 Income?

Question

Hey landlords,

For those of you who have scaled beyond just a few doors — how did you handle financing?

I’ve been hearing more about loan products that base approval on the property’s income instead of personal income. From what I understand, this could make it easier to pick up that 5th, 10th, or even 15th rental without your W-2 being the main factor.

Have any of you used this type of loan before? Did it help you grow your portfolio faster, or were there trade-offs you wish you’d known about?

Would love to hear how others in the community approached this stage of scaling.

Caleb Brown · Answer

As Timothy said it's DSCR. A great product. When you are analyzing deals I would speak to your lender and weigh the different loan options. Compare rates, closing costs, etc.

Timothy Hero · Answer

It's called a DSCR loan, and I've closed nearly 400 of them.

Lenders look at credit and the cash flow. Typically speaking, if the property is livable, not rural, cash flows, and you have decent credit, you're approved and since these aren't reported on credit, you can have unlimited.

Eric Gerakos · Answer

I would focus more on collecting money, not rentals. They're not the same thing.

Jason Malabute · Answer

I’m both an investor and a CPA who works solely with real estate investors, and I’ve seen this stage of scaling from both sides. There are really two main ways people do it: raise capital from other investors or use loan products. Both can definitely help you grow beyond what your W-2 would allow, but they each come with trade-offs. Any time you leverage debt or take on other people’s capital, your risk profile increases, so you’ll want to weigh the upside against the added responsibility and exposure. The key is making sure the numbers pencil out conservatively so that the financing truly accelerates your growth instead of creating future headaches.

Andrew Zamboroski · Answer

DSCR loans are exactly the loan in this category. No income needed (beyond subject property of course). These should generally be much easier than a conventional loan (not all of them are of course 😉). Work with the right partner and they will guide you into the best product fit!

Scaling Rentals Without Relying on Your 9-5 Income?

Scaling Rentals Without Relying on Your 9-5 Income?

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