What's better than a DSCR loan?

A conventional investment property loan, if you qualify. It costs roughly 0.75 to 2 points less in rate, has no prepayment penalty and lower fees. You need documented income, a debt-to-income ratio under about 45%, and fewer than ten financed properties. Past those limits, DSCR is usually the best option available.

Conventional wins on price. It loses on flexibility: no LLC on title, full income documentation, and a hard cap of ten financed properties. Self-employed borrowers with heavy write-offs often cannot qualify conventionally at all.

Other options suit specific situations. Portfolio loans from local banks can beat DSCR pricing for relationship borrowers, often with adjustable rates. Seller financing avoids a lender. For a property that needs work, a bridge loan that converts to DSCR after stabilization is the usual route. For a cash-flowing rental and a borrower past conventional limits, DSCR is hard to beat.