Based on a common borrower scenario in our practice. Details are composite to protect client privacy.
The Borrower
Marcus is a Houston-area buy-and-hold investor. He works a full-time W-2 job as a project manager and has been building a rental portfolio on the side for nine years. He owns five single-family homes across the Greater Houston area — properties in Katy, Pearland, and Pasadena — all cash-flowing, all occupied.
The Problem
Marcus found a duplex in Spring with solid numbers: two units, each renting at $1,475/month, listed in the mid-$300,000s. The property would cashflow from day one. The deal made sense. His lender disagreed.
His existing bank told him they could not approve a sixth investment property on a conventional loan. Fannie Mae and Freddie Mac guidelines cap conventional financing at ten financed properties, but most lenders — including major banks and credit unions — stop lending to investors at four. Marcus had already hit that wall. He had good credit, steady income, and five performing properties. None of that mattered to his bank.
He had spent six weeks trying to make a conventional loan work. Three lenders. Three declines. The reason was always the same: too many properties.
What Made It Possible
The DSCR loan — Debt Service Coverage Ratio — is designed for exactly this situation. Instead of qualifying Marcus on his personal income or tax returns, the loan qualifies the property on its own income.
Here is how it works: the lender looks at the rental income the property generates and compares it to the monthly mortgage payment. If the rental income covers the payment — typically at a ratio of 1.0 to 1.25 — the property qualifies. Marcus's W-2 income, his other properties, and his existing debt load were not part of the equation.
The duplex cleared the bar. Combined rent of $2,950/month against a projected mortgage payment in the low-$2,000s gave it a DSCR above 1.25. The property paid for itself on paper, and that was what the lender needed to see.
There is no property limit with a DSCR loan. Whether you own one rental property or twenty, each new deal is evaluated on its own merits. Marcus could also close in the name of his LLC, which he had already set up for his existing portfolio. No income verification, no W-2 review, no personal debt-to-income calculation — just the property's numbers.
The Outcome
Marcus closed on the Spring duplex in 31 days. Purchase price in the mid-$300,000s. Loan in the low-$270,000s, closed in his LLC name. Both units were already occupied at close, so his first month of ownership came with rent already collected. He now owns six income-producing properties, and the structure he is using has no ceiling on how far he can scale.
Brandon's Note
What I see all the time with investors like Marcus is that their bank treats property number five or six like a problem, when the investor has actually done everything right. Marcus had cash-flowing rentals, clean payment history, and a deal with strong numbers. The bank's answer was still no — not because of Marcus, but because of their own internal policy.
A DSCR loan removes your personal income from the equation and lets the property speak for itself. If you have been turned away because of how many rentals you own, that is not a dead end. Call me and we will look at the deal together.
If you are an investor who has been told no because of your existing portfolio, call Brandon at 832-997-1527 or start your pre-approval at brandonhuynh.net.
Have You Been Told No Because of Your Portfolio?
If your bank stopped lending to you because of how many properties you own, call Brandon. DSCR loans have no property limit and no income verification.
Talk to Brandon About Your Next Deal