This Weeks Rates:
Insured:
- 5-year fixed: Starting at 3.94%
- Variable: Starting at 3.54%
Insurable:
- 5-year fixed: Starting at 3.94%
- Variable: Starting at 3.69%
Conventional:
- 5-year fixed: Starting at 4.19%
- Variable: Starting at 3.95%
CMB:
- 5-Year: 3.0%
- 10-Year: 3.6%
In this episode of the Close More Deals Podcast, host Scott Dillingham dives deep into rental property investing strategies, revealing how brokers can help clients qualify for unlimited rental properties without hitting the dreaded debt wall. Many investors start strong with traditional A lenders, but soon face limits on debt-to-income ratios and the number of financed properties, leading to stalled growth in their real estate portfolios. Scott breaks down common pitfalls, like shifting to B lenders for higher debt allowances or resorting to costly private lending, and explains why these options often fall short for long-term rental property financing.
Scott introduces a game-changing approach: leveraging special commercial lending programs that apply commercial underwriting to residential rental properties. This method focuses on the property's cash flow—using debt service coverage ratio (DSCR) principles—rather than personal credit or income, allowing clients to secure loans for as many properties as they can cash-flow positively. With rates typically ranging from 4.5% to 7%, plus a modest 2% fee, this option often undercuts B and private lenders while enabling unlimited scaling. Ideal for investors eyeing duplexes or multi-family units, it emphasizes buying stronger cash-flowing assets to maximize loan-to-value (LTV) ratios up to 65% or more, turning potential weaknesses into opportunities for smarter real estate decisions.
Whether you're a broker guiding first-time rental investors or a seasoned landlord expanding your holdings, this episode equips you with actionable tips on financing multiple rental properties through innovative DSCR loans and commercial lenses. Scott stresses structuring deals in corporations for flexibility and highlights how this strategy supports endless portfolio growth without the high fees or restrictions of traditional paths, making it a must-listen for anyone serious about investment property mortgage rates and sustainable wealth building.
Key Takeaways
- Avoid the Debt Wall in Rental Investing: Traditional A lenders cap properties based on debt-to-income ratios, but shifting early to cash-flow-focused options prevents portfolio stagnation and bad deals.
- B Lenders for Expansion: These allow higher debt ratios and more rental income consideration than banks, serving as a bridge for investors needing beyond four financed properties.
- Private Lending Pitfalls: While flexible, expect rates up to 15% and fees from 2-6%, making it a last resort—explore better alternatives first for cost-effective growth.
- Commercial Underwriting for Residential Rentals: Use special programs to qualify for unlimited properties by evaluating each asset's income vs. expenses, often ignoring personal credit for DSCR-based approvals.
- Cash Flow Drives Loan Limits: Lenders cap LTV at levels ensuring positive cash flow (e.g., 65% on weaker properties), signaling the need for stronger investments to unlock higher financing.
- Cost Comparison for Scaling: Commercial rates (4.5-7%) and 2% fees beat B (5-7%, 2-3% fees) and private options, enabling nonstop rental property portfolio expansion at A-lender-like pricing.
Links to Show References
- LendCity Mortgages (for Pre-Approvals and Rental Financing Guidance): lendcity.ca
- Close More Deals Podcast (Subscribe for More Investing Tips): Search on your favorite platform or visit LendCity resources
- (00:00) - - Introduction to Qualifying Clients for Unlimited Rental Properties
- (01:12) - - How B Lenders Help Overcome Property Limits in Real Estate Investing
- (01:29) - - The High Costs of Private Lending for Multiple Rental Properties
- (02:04) - - Unlock Endless Growth with Commercial Underwriting on Residential Rentals
- (03:11) - - Debt Service Coverage Ratio (DSCR) Explained: Cash Flow Over Personal Debt
- (03:27) - - Structuring Unlimited Deals: Rates, Fees, and Corporation Tips
- (04:26) - - Why This Beats Traditional Financing for Portfolio Scaling
Show Resources:
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