Real Estate Investment
The Investor's
Financing Playbook
Ten financing strategies — from conventional mortgages to creative structures — with the numbers and context you need to match capital to deal type.
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| Loan type | Down payment | Approval speed | Rate range | Best for |
|---|---|---|---|---|
| Conventional | 20–25% | Weeks | Market rate | Long-term buy-and-hold |
| DSCR | 20–30% | 1–3 weeks | +0.5–1.5% over conv. | Self-employed, scaling |
| Hard Money | 10–20% | Days | 9–14% | Fix-and-flip, fast close |
| Private Money | Negotiable | Days | Negotiable | Network investors |
| Portfolio Loan | 20–25% | 2–4 weeks | Slightly above conv. | Multi-property investors |
| HELOC / HEL | N/A (equity) | 2–4 weeks | Prime ± 1% | Leveraging existing equity |
| Seller Financing | Negotiable | Negotiated | Below market possible | Unique, hard-to-finance deals |
| Commercial (5+) | 20–30% | Weeks–months | Higher than residential | Apartment buildings |
| House Hacking | 3.5–5% | 3–4 weeks | Owner-occ. rates | First-time investors |
| BRRRR | 10–20% (HML) | Fast → refi | High → market after refi | Value-add repeat buyers |
| FHA Loan | 3.5% | 3–4 weeks | Below market | First-time house hackers |
| CHFA Loan | 0–3% (w/ DPA) | 3–5 weeks | Below market | Colorado buyers, Front Range |
Loan-to-Value
LTV
Loan amount as a percentage of the property's appraised value. Lower LTV means less lender risk and better rates.
Loan ÷ Value × 100DSCR
Debt service coverage ratio
How well rental income covers the mortgage. Most lenders require 1.0–1.25 minimum to qualify.
Rent ÷ Debt paymentCap Rate
Capitalization rate
Unleveraged return on a property. Useful for comparing deals without factoring in how they're financed.
NOI ÷ Purchase priceCash-on-Cash
CoC return
Annual cash flow compared to actual cash invested. Accounts for leverage — the metric most investors track.
Annual cash flow ÷ Cash investedARV
After-repair value
Estimated value of a property after renovation. Hard money lenders often lend as a percentage of ARV.
Post-renovation appraisalNOI
Net operating income
Gross rental income minus operating expenses, before debt service. The foundation of commercial valuation.
Gross income − Expenses