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Derek Bissen, March 13 2023

​DSCR Loans – The Investor Cash Flow Loan

​Attention real estate investors! Are you tired of the hassle and piles of paperwork associated with traditional bank loans or the high-interest rates of hard money loans? Look no further than our DSCR - Investor Cash Flow Mortgage Program! Unlike traditional loans, no tax returns or personal income are required, and there are no complex interpretations of your other investment properties are required.

Who is the ideal candidate for this program?

The ideal candidate for a DSCR loan is a residential property investor who are looking for a simpler way to purchase their next rental property, without the headaches of a traditional investor loan, while avoiding the "hard money" interest rates and terms.

How does a DSCR Loan Work?

Instead of income verification, we use the monthly rental income potential of the investment property you are financing as the "income" for the new loan, and then we compare this number with the home's expenses, such as property taxes, insurance, and association fees.


First, your lender orders a ​standard appraisal of the home by a licensed real estate appraiser to determine the market value of the home. What sets this program apart is that we also order an additional report, called a Market Rent Analysis, which provides information about the average market rents of similar homes in the same marketplace. 

This rental figure then becomes the INCOME for the loan.  Next, we’ll calculate the standard EXPENSES for the home, including property taxes, property insurance, along with any required association dues.

And finally, we calculate the debt service coverage ratio as follows:

Monthly RENTAL INCOME divided by Monthly EXPENSES.

The annual net figure of DSCR can also be calculated using annual figures as well as monthly figures. For instance, annual gross operating income / rental income divided by annual debt/ total debt. The ratio itself is the same, whether you calculate it monthly or annually.


​For most investment property loans like this one, the ideal ratio should be 1.00 or higher. The higher the number, the more the property cash flows and the more profitable it is from an investment standpoint. 

There are times when a negative debt coverage ratio can make for a profitable venture in the long run, especially when an existing home has been mismanaged and/or needs improvements. In this type of scenario, a DSCR loan allows the investor ample time to improve the property and/or adjust the rents to reflect the current market rates. This is why we allow a negative DSCR ratio down to 0.75 for seasoned investors on a case by case basis.


          » Single Family Homes
          » Townhomes/Villas
          » 2-4 Unit Multi-Family Homes
          » 5-8 Unit Residential Properties 
          » Condominiums
          » Non-warrantable Condos
          » Condotels

How do I qualify for a DSCR loan?

How do I calculate the Debt Service Coverage Ratio (DSCR)?

Our free DSCR calculator allows you to quickly run your own DSCR scenarios to determine the cashflow potential of any home. Unlike other DSCR calculators on the web that are geared for commercial investment loans, ours is much easier to use, and is specifically designed for use with our DSCR Investor Cash Flow Program.  You'll want to add this one to your favorites!
Try it out today » 

​So if you’re ready for an easier way to finance your next investment opportunity without the headaches of traditional financing and inexperienced lenders, check out our DSCR Investor Cash Flow Program.  »  

Give us a call or click today.  If you have a question, drop us a line and we'll get back to you straight away!

Yours in successful homeownership,

Derek Bissen
Loan Originator
Unconventional Lending Program Director

​About the Author: 

Derek Bissen is a licensed Mortgage Loan Originator with over 25 years of experience in the industry. Derek is a self-employed lending expert who is known for his ability to work with borrowers who have substantial wealth and non-traditional lending needs. He is a creative loan structurer and specializes in portfolio lending, asset-based lending, bank statement lending, as well as traditional loans such as Conventional, FHA, VA, and first-time homebuyers.

Derek's expertise in the mortgage industry is unparalleled. He is a trusted advisor to his clients, providing them with customized loan solutions that meet their unique financial goals and needs. His vast experience and knowledge make him a valuable asset to anyone looking to purchase a home or refinance their existing mortgage.

As a highly-experienced loan originator and author, Derek is committed to sharing his knowledge with others. He regularly provides valuable insights and advice to readers looking to navigate the complex world of mortgage lending. His articles are informative, engaging, and backed by years of hands-on experience.

With his wealth of knowledge and dedication to his clients, he is the go-to source for all your mortgage lending needs. If you're looking for a reliable and trustworthy mortgage expert, contact Derek today to learn more about how he can help you achieve your financial goals.


Written by

Derek Bissen

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