How Fix-and-Flip and DSR Loans Work for Investment Properties

How Fix-and-Flip and DSCR Loans Work for Investment Properties

Real estate investing has exploded in popularity in recent years—especially in fast-growing markets like Houston, TX. If you're buying, renovating, or renting out property, understanding Fix-and-Flip and DSCR (Debt Service Coverage Ratio) loans can help you leverage capital and scale your business. Here’s how these two powerful financing tools work.

🛠️ What Are Fix-and-Flip Loans?

Fix-and-flip loans are short-term financing solutions designed for real estate investors who plan to buy distressed or undervalued properties, renovate them, and sell for a profit.

Key Features:

• Loan Term: 6 to 18 months

• Speed: Fast approvals and funding (often within days)

• Loan Amount: Based on ARV (After Repair Value), not current value

• Down Payment: Typically 10-20%

• Interest Rates: Usually higher than conventional loans due to short-term risk

  
  

Best For: Investors flipping single-family homes (SFR), townhomes, or small multifamily units that need cosmetic or structural improvements.

💰 What Are DSCR Loans?

DSCR (Debt Service Coverage Ratio) loans are primarily used to purchase or refinance rental investment properties—based on the income the property generates, not your personal income.

Key Features:

• No Tax Returns Required: Approval is based on the property’s cash flow

• DSCR Formula: Net Operating Income ÷ Debt Service

• Typical DSCR Requirement: 1.0x or higher (i.e., property must break even or cash flow)

• Loan Term: 30-year fixed or interest-only options

• Eligible Properties: SFRs, condos, small multifamily, short-term rentals (Airbnb/VRBO)

Best For: Investors building a rental portfolio who want long-term, low-documentation loans.

🏘️ When to Use Each Loan Type

Scenario	Best Loan Option
Flipping a distressed home	Fix-and-Flip Loan
Buying turnkey rental property	DSCR Loan
Rehabbing a duplex to hold long-term	Fix-and-Flip then refinance into DSCR
Buying short-term Airbnb property	DSCR Loan (if it cash flows)

📈 Why Investors Choose Amerimort

At Amerimort, we work with both experienced and first-time real estate investors throughout Houston and surrounding Texas markets. We understand the speed and flexibility you need when investing in:

• Older homes

• Burned or vacant properties

• Rental homes with strong equity

• Properties outside major metros (e.g., Conroe, Brenham, Huntsville)

Whether you’re flipping homes or building rental cash flow, we’ll help you match the right loan to your investment strategy.

🔑 Ready to Get Started?

Let Commercial Partners of Texas / Amerimort help you close your next investment deal fast—with no red tape. Reach out today at 📞 832-607-1113 or 📧 george@amerimort.com to discuss your property and get a same-day quote.

We buy houses or fund investors who do!