The quick comparison
The "best" investment property loan depends on your situation. There are four main paths in California: a conventional investor loan (lowest rate, qualifies on your tax returns), a DSCR loan (qualifies on the property's rent), a bank statement loan (qualifies on your deposits), and hard money (qualifies on the asset, closes fast). Match the loan to your strategy, not the other way around.
Every serious investor eventually uses more than one of these. The trick is knowing which fits the deal in front of you — and lining them up side by side before you commit.
| Feature | Conventional investor | DSCR | Bank statement | Hard money |
|---|---|---|---|---|
| Qualifies on | Tax returns & personal income | Property rent vs. payment | 12–24 mo. bank deposits | The asset (property value) |
| Min. down | 15–25% | 20–25% | 10–25% | 25–30% |
| Rate | Lowest | Mid | Mid-high | Highest |
| Best use | First rentals & W-2 investors | Scaling & self-employed buy-and-hold | Self-employed borrowers | Flips & fast closes |
| Speed | Slowest (full docs) | Fast | Moderate | Fastest (days) |
Which should you choose?
Skip to the profile that sounds like you.
First rental, strong W-2 income → conventional
If you have a steady salary, clean tax returns, and you're buying your first one to three rentals, a conventional investor loan is almost always the cheapest money available. You can put as little as 15% down on a single-unit rental, and the rate is the lowest of the four. The trade-off is paperwork and the Fannie/Freddie limit of ten financed properties.
Scaling a portfolio / past 10 properties → DSCR
Once conventional financing caps out at ten financed properties — or the documentation becomes a bottleneck — a DSCR loan is how most investors keep buying. It qualifies on the property's rent covering its payment (the debt-service-coverage ratio), not your personal income, so there's no cap on how many you can hold. Title can usually be vested in an LLC.
Self-employed with write-offs → bank statement or DSCR
If your tax returns show little income after deductions, conventional underwriting works against you. A bank statement loan qualifies on 12–24 months of deposits instead of your adjusted gross income, and a DSCR loan skips personal income entirely. Both are common paths for business owners and 1099 investors.
Flipping or need to close in 10 days → hard money
For a fix-and-flip, an auction, or any deal where speed wins, hard money funds on the asset and can close in days. It's the most expensive option, so investors typically use it short-term, then refinance into a DSCR loan if they decide to hold the property as a rental — the well-known BRRRR strategy (buy, rehab, rent, refinance, repeat).
A closer look at each option
Conventional investor loans offer the lowest rates and down payments as low as 15%, but they underwrite your full financial picture — tax returns, debt-to-income, and a hard cap of ten financed properties. Best for W-2 earners buying their first rentals. See conventional loans →
DSCR loans qualify on the rent the property generates versus its mortgage payment, so your personal income never enters the equation and there's no property-count limit. Slightly higher rates than conventional, but the scalability is why portfolio investors rely on them. See DSCR loans →
Bank statement loans use 12–24 months of business or personal deposits to establish income, which rescues self-employed borrowers whose tax returns understate what they really earn. Rates sit between DSCR and hard money. See bank statement loans →
Hard money is asset-based bridge financing: fast, flexible, and short-term, priced highest because it's built for flips and closes measured in days rather than weeks. Pair it with a DSCR refinance to hold long-term. See hard money loans → or explore all investment property loans.
Frequently asked questions
What's the easiest investment property loan to qualify for?
A DSCR loan is usually the easiest for investors because it qualifies on the property's rental income rather than your personal tax returns or debt-to-income ratio. If the projected rent covers the payment, you can often qualify without proving personal income.
Which investment property loan has the lowest down payment?
A conventional investor loan can go as low as 15% down on a single-unit rental, which is typically the smallest down payment of the four options. DSCR and bank statement loans usually start around 20%, and hard money the highest at 25–30%.
Can I use rental income to qualify?
Yes. DSCR loans qualify almost entirely on the property's rent versus its payment. Conventional loans also let you count a portion of market or lease rent toward qualifying, though they still review your personal income and debt.
What if I'm self-employed?
If your tax returns show low income after write-offs, a DSCR loan (qualifies on rent) or a bank statement loan (qualifies on 12–24 months of deposits) usually works better than conventional financing that relies on adjusted gross income.
Which loan is best for a fix-and-flip?
Hard money is built for flips and fast closes — it funds on the asset and can close in days. Many investors flip with hard money, then refinance into a DSCR loan if they decide to hold the property as a rental (the BRRRR strategy).
Can I hold an investment property in an LLC?
Yes. DSCR and hard money loans commonly allow (and sometimes prefer) vesting title in an LLC. Conventional investor loans generally require you to hold title personally, though some investors transfer to an LLC after closing — confirm the details with your broker first.
Save Financial, Inc. — NMLS #377740, DRE #01875766. Equal Housing Opportunity. Figures are illustrative for 2026 and not an offer of credit or a guarantee of rates or approval.