Rental Property Loans
What is a Rental Property Loan?
A rental property loan, also known as a buy-and-hold loan, is designed for real estate investors who purchase properties to generate ongoing rental income. These loans provide financing for single-family homes, multi-family properties, and small apartment buildings intended to be held as long-term investments.
Common Uses
Single-Family Rentals
Financing for single-family homes purchased for long-term rental income
Multi-Family Properties
Duplexes, triplexes, and fourplexes generating rental income from multiple units
Portfolio Building
Acquiring multiple rental properties to build a diversified investment portfolio
Cash Flow Properties
Properties purchased specifically for positive monthly cash flow and long-term appreciation
How Rental Property Loans Are Evaluated
Rental property loans are evaluated based on the property's income-generating potential. Key evaluation factors include:
- •Rental Income: Current or projected rental income from the property
- •Debt Service Coverage Ratio (DSCR): The ratio of rental income to mortgage payment
- •Property Condition: Physical condition and marketability of the property
- •Market Rental Rates: Comparable rental rates in the local market
- •Investor Experience: Track record of managing rental properties successfully
Refinance & Portfolio Loans
What are Refinance & Portfolio Loans?
Refinance and portfolio loans provide financing solutions for real estate investors looking to optimize their existing investment properties or consolidate multiple properties under a single loan structure. These programs help investors improve cash flow, access equity, or simplify property management.
Common Uses
Cash-Out Refinance
Accessing equity from investment properties to fund additional acquisitions or improvements
Rate & Term Refinance
Improving loan terms, reducing interest rates, or extending loan duration for better cash flow
Portfolio Consolidation
Combining multiple properties under a single loan for simplified management and potentially better terms
Transition from Short-Term Debt
Refinancing fix-and-flip or bridge loans into long-term rental property financing
How Refinance & Portfolio Loans Are Evaluated
Refinance and portfolio loans are evaluated based on the current performance and value of the investment properties. Key evaluation factors include:
- •Current Property Value: Updated appraisals or valuations of the properties being refinanced
- •Rental Income Performance: Historical and current rental income from the properties
- •Existing Debt Structure: Current loan balances, terms, and payment history
- •Portfolio Performance: Overall cash flow and performance metrics across multiple properties
- •Investor Track Record: History of successful property management and loan performance