Get Expert Investment Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Real estate investors using the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) need speed, flexibility, and repeatable access to capital. That’s exactly where DSCR loans shine. If you’re scaling your rental portfolio using BRRRR, this guide breaks down how DSCR loans empower each phase of your strategy—while freeing you from personal income limitations.
Ready to grow faster? Submit your loan scenario now and get matched with a DSCR lender today.
What Is a DSCR Loan?
A DSCR (Debt Service Coverage Ratio) loan is an investor-focused mortgage that qualifies the borrower based on the property’s cash flow, not personal income. Lenders calculate DSCR using this formula:
DSCR = Net Operating Income ÷ Total Debt Service
If your rental income covers (or exceeds) your monthly mortgage payments, you’re in the game—even without W2s or tax returns.
Why DSCR Loans Work So Well with BRRRR
The BRRRR method requires you to:
- Buy undervalued properties, often needing rehab
- Rehab them for rental readiness
- Rent to generate consistent cash flow
- Refinance to recoup capital
- Repeat the process with new acquisitions
DSCR loans supercharge this method because they:
- Don’t require income or employment verification
- Allow refinancing based on market rents
- Enable quick cash-out refis to redeploy equity
- Work well with LLCs and multiple properties
- Offer interest-only options for max cash flow
Step-by-Step: Using DSCR Loans in the BRRRR Process
Step 1: Buy with Bridge or Fix & Flip Financing
Most BRRRR deals begin with a distressed property. These often won’t qualify for a DSCR loan upfront. That’s why experienced investors start with:
- Fix & Flip Loans: Short-term, fast-funding loans for renovations.
- Bridge Loans: Temporary loans to quickly close on deals before refinancing.
Tip: Choose a lender that offers both fix & flip and DSCR refi options for a seamless exit.
Step 2: Rehab the Property
Once the property is secured, complete renovations to meet rental and appraisal standards. Focus on updates that:
- Increase rent potential
- Improve appraisal value
- Ensure the unit is “rent-ready” for DSCR qualification
Step 3: Rent It Out
DSCR lenders calculate your loan eligibility using either:
- Market rent from an appraiser’s rent survey (Form 1007), or
- Actual lease income, if already rented
Some will even accept short-term rental income (e.g., Airbnb) backed by data from platforms like AirDNA.
Step 4: Refinance with a DSCR Loan
Now that your property is stabilized, refinance into a DSCR loan to pull cash out and reduce your monthly payments.
Typical DSCR refinance terms:
- Loan-to-Value (LTV): Up to 75% for cash-out
- Minimum DSCR: Often 1.2 (but some go as low as 1.0)
- No income documentation required
- Close in an LLC, if desired
DSCR refis let you skip the red tape and get funded based on your asset—not your personal finances.
Step 5: Repeat the Process
The true power of BRRRR + DSCR lies in scalability. You can keep recycling capital from each project to fund the next—no W2, no tax returns, and no conventional lender limits.
Ready to repeat your BRRRR strategy? Get pre-qualified now and close your next deal faster.
Real-World Example
Investor Case Study: Laura’s 5-Property BRRRR Stack
- Bought a distressed triplex using a hard money loan
- Rehabs completed in 90 days with $65K budget
- Secured long-term tenants at $3,000/month
- Refinanced into a DSCR loan at 75% LTV, pulling out $120K
- Reused that equity to fund her next down payment
She repeated this process five times in two years—all using DSCR loans to scale.
Advantages of DSCR Loans for BRRRR Investors
No income docs required
Qualify based on property cash flow
Cash-out refinance options available
Interest-only periods for improved ROI
No cap on financed properties
LLC-friendly for liability protection
Common Questions About DSCR Loans & BRRRR
Can I use a DSCR loan for the initial property purchase?
Only if the property is turnkey. Otherwise, use a fix & flip loan, then refinance with DSCR.
Do I need tenants in place before refinancing?
No. DSCR lenders can use market rent estimates if no lease is active.
What’s the typical credit score required?
Most lenders require a minimum of 640. Scores of 700+ get better terms.
How fast can I refinance with a DSCR loan?
Many lenders require no seasoning, meaning you can refinance as soon as renovations are complete.
Build Faster with Investor-Friendly Financing
Stop letting W2 income or tax returns hold you back. DSCR loans let the property do the talking—so you can keep building.
Start your loan scenario now and get connected to the right DSCR lender for your BRRRR game plan.
Read Next
- The BRRRR-Friendly Guide to DSCR Loan Refinancing
- Fix and Flip Loans Explained
- Refinancing with DSCR Loans: Unlocking Equity in Your Investment Properties
FAQ
What does “DSCR” mean in real estate?
DSCR stands for Debt Service Coverage Ratio. It measures a property’s income versus its debt obligations. A DSCR of 1.25 means the property earns 25% more than it needs to cover the mortgage.
Can I BRRRR properties with DSCR loans only?
Not entirely. You’ll likely start with a bridge or fix & flip loan and exit with a DSCR refinance once the property is stabilized.
Are there any prepayment penalties?
Yes, most DSCR loans have 3–5 year step-down prepayment penalties. These can often reduce your interest rate, but ask your lender about specific terms.
Want to maximize leverage, reduce friction, and repeat your BRRRR strategy faster? DSCR loans are your ultimate financing tool.
Submit your deal here to get started
Get Expert Investment Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
