DSCR
Gross rent ÷ PITIA
The lender’s number. 1.00 means rent covers the payment. Tiaira’s calculator runs it.
The investor playbook
Your first rental, or your fifth — without the guesswork.
Everything Tiaira ends up explaining in the first conversation, written down: the myths that stop people, the six steps that actually happen, BRRRR, LLCs, the four numbers worth knowing, and a checklist for the week before you start shopping.
is it dumb that I want to buy a rental and I don’t even know what DSCR stands for
Not dumb. Debt service coverage ratio — rent divided by payment. That’s the whole trick. Everything else is detail, and the detail is my job.
Things investors have been told
Six myths that keep people renting to other people’s tenants
You need W-2 income to get an investor loan.
The truth: DSCR loans qualify on the property’s rent, bank statement loans on your deposits, asset depletion on your balance sheet. W-2 income is one route, not the route.
You need 25% down, minimum.
The truth: Conventional single-family rentals start around 15%; owner-occupied house hacks start at 3.5–5%; DSCR typically runs 20–25%. The right program for the deal decides the number — not a rule of thumb.
Banks won’t lend to an LLC.
The truth: Agency loans won’t. DSCR loans will — the LLC is the borrower and you sign a guaranty. It is one of the main reasons investors choose DSCR.
A good deal means positive cash flow on day one.
The truth: Lenders measure DSCR on gross rent; real cash flow subtracts management, vacancy, maintenance and capital expenses. A 1.10 DSCR can be a negative-cash-flow property. Model both.
Rates are too high right now to invest.
The truth: Nobody can time rates. Rentals are underwritten on today’s rent and today’s rate; if the ratio works, the deal works. If rates fall, you refinance. If they don’t, you planned for it.
Once you hit 10 properties, you’re done.
The truth: The ten-property cap is an agency rule. DSCR and portfolio loans don’t count that way, which is exactly how investors get to 11 and beyond.
The path
Six steps from “I think I want a rental” to keys
- 1
Pick a strategy
Day 1Long-term rental, house hack, BRRRR, short-term rental. Each one points at a different loan, a different down payment and a different timeline. Decide this first; everything else follows.
- 2
Get pre-qualified the investor way
Week 1A 15-minute conversation with Tiaira: credit, reserves, entity, target market. For DSCR there’s no income file — you walk out knowing your purchase range and your program options.
- 3
Analyze deals with real numbers
Weeks 1–6Non-homestead taxes, landlord insurance quotes, realistic rent. Run the DSCR and your true cash flow. Tiaira will sanity-check any deal you’re serious about — before you write.
- 4
Write the offer
When you find itTiaira provides the pre-qualification letter, and the contract gets structured for your loan: inspection period, financing contingency, and an LLC named correctly if you’re vesting in one.
- 5
Appraisal, rent schedule, underwriting
Weeks 1–3 under contractThe appraiser values the property and documents market rent (the 1007 or 1025). Insurance binds. The LLC docs and reserves get verified. For DSCR, this is the whole file.
- 6
Close. Lease. Repeat.
Closing daySign at the title company, fund, hand over the keys. Six months later, your rent history and the equity you’ve built start the next conversation — which starts with a text.
how long does step 2 take if I’m doing DSCR?
One call and a credit pull. No income docs means no two-week scavenger hunt. You can be writing offers this week.
BRRRR, honestly
Buy. Rehab. Rent. Refinance. Repeat.
The strategy works when three things line up: the after-repair value comes in where you modeled, the rent supports the new payment, and the seasoning rule on the refinance matches your timeline. Investors get hurt on the third one — they buy, rehab in sixty days, and then discover the cash-out program wants six months of ownership.
Tiaira maps the refinance before you buy: which program, what LTV, what seasoning, what the prepayment penalty on the first loan would cost if you exit early. Then the rehab budget and timeline get built around real rules instead of a podcast.
The cash-out refinance page →The BRRRR questions to answer before buying
- What’s the realistic ARV — from comps, not hope?
- What rent does the appraiser’s schedule support after rehab?
- What LTV will the cash-out program allow, and when?
- Does the first loan carry a prepayment penalty? For how long?
- If the refi comes in short, can you hold with the capital still in?
LLC prep list
- Articles of organization (filed with the state)
- Operating agreement listing members and percentages
- EIN confirmation letter from the IRS
- Certificate of good standing (recent)
- Foreign registration if buying in a different state
- Business bank account — reserves and rent should flow through it
Entities
Buying in an LLC: what the lender needs
Whether to use an LLC is an attorney-and-CPA question. Whether the loan allows it is a Tiaira question, and the answer is: DSCR yes, agency no. If you’re vesting in an entity, form it before you go under contract, make the purchase agreement match the entity name, and get the lease and insurance in the entity’s name too. Members typically sign a personal guaranty — the LLC is the borrower, but the lender still wants a human.
formed the LLC last week. the contract is in my personal name though. problem?
Fixable. We’ll have the agent do an assignment or amendment to the LLC before we order the appraisal. Send me the LLC docs today so it doesn’t cost you a day later.
Numbers that matter
Four metrics, one of which the lender cares about
Cash-on-cash return
Annual cash flow ÷ cash invested
Your number. What the down payment and closing costs actually earn you each year, after real expenses.
Cap rate
Net operating income ÷ price
Property vs. property, ignoring financing. Useful for comparing deals; useless for deciding if you can afford one.
Gross rent multiplier
Price ÷ annual gross rent
The quick screen. Lower is cheaper relative to rent. Good for sorting a list, not for closing a deal.
Before you shop
The week-before checklist
- Credit pulled and reviewed with Tiaira — know your score before you shop
- Reserves in a seasoned account: down payment + closing costs + 3–6 months PITIA
- LLC formed (if using one): articles, operating agreement, EIN letter, good standing
- Target market and property type chosen — duplex vs. single-family vs. STR
- Landlord insurance quote in hand for the price range you’re shopping
- Non-homestead tax rate for the county you’re buying in
- A property manager identified, even if you plan to self-manage
- Pre-qualification letter from Tiaira, dated and ready to attach
do I really need the insurance quote before I even find a property?
You need a ballpark. Landlord policies run higher than homeowners, and insurance is a third of what moves your DSCR. Ten minutes now saves a surprise at underwriting.
Straight answers
Playbook FAQ
How do I start investing in rental property with no landlord experience?
Two common on-ramps: house hacking (buy a 2–4 unit as your primary home with a low down payment and rent the other units) or a DSCR loan on a single rental, which many programs allow for first-time investors. Talk to Tiaira first — the loan you can get determines the deals you should look at.
How much money do I need to buy my first rental?
Down payment (typically 15–25% for a pure investment property, far less for an owner-occupied house hack), closing costs (often 2–4% of price), and reserves of several months of the full payment. Tiaira will give you the real figure for your price range and program.
Should I buy in an LLC?
That is a question for your attorney and CPA, who will weigh liability, taxes and lending. From the loan side: agency loans close in your personal name; DSCR loans can close in the LLC. If LLC vesting matters to you, it points you toward DSCR.
What is the BRRRR method?
Buy, Rehab, Rent, Refinance, Repeat — purchase a property that needs work (often with cash or short-term money), fix it, place a tenant, then refinance into a long-term loan based on the new value and rent to pull your capital back out for the next one. The refinance step has seasoning and LTV rules that Tiaira maps out before you buy.
Is real estate investing worth it with current interest rates?
It depends entirely on the deal. A property is underwritten on today’s rent and today’s rate; if the DSCR and your real cash flow work, the deal works, and a future refinance is upside rather than a requirement. Nobody — including Tiaira — can tell you where rates go next.
Real clients, real reviews
Five stars.4.98 across 52 verified reviews
Verified on Experience.com — paraphrased highlights, every client real.
Great communication, knowledgeable, and genuinely helpful with everything I needed.
Anthony A. · Minneapolis, MNPurchase
Her response time and overall efficiency were unmatched — and she took extra care to make sure I was getting the best fit the whole way through.
Alyssa M. · New Brighton, MNPurchase
Always there to help no matter when or what it was. As a first-timer, having someone I could trust and rely on made all the difference.
Bronte B. · Edina, MNFirst purchase
Very responsive and extremely polite. She gave me multiple ways to make sure everything was secured and worked diligently to get me where I needed to be.
Broderick W. · Minneapolis, MNPurchase
Communication was always great. My questions were answered thoroughly and she made sure I understood everything that was going on.
Tiembra L. · Ramsey, MNPurchase
She made my first home purchase a smooth experience — professional, communicative and dedicated.
Virginia K. · Minneapolis, MNFirst purchase
Worked diligently on my loan from start to finish and was always helpful with information when I needed it.
Alexis T. · Saint Paul, MNPurchase
Everything was done in a very timely manner.
Anthony F. · Fridley, MNPurchase
Ready for step two?
One conversation, no income docs. You’ll leave knowing your purchase range and your program — and you can be writing offers this week.