How to Build an Investment Portfolio Using DSCR Loans

By Rick Carrier, NMLS #268110 · Innovative Mortgage Services, Inc. NMLS #250769 · Checked on September 28, 2026

Most investors I work with start the same way: a conventional loan on their first rental, maybe a second. Then they hit a wall. Either their tax returns show less income than they really have, because depreciation and write-offs do their job, or they run into the limit on how many financed properties a conventional loan allows. That's where a DSCR loan comes in.

A DSCR loan isn't magic, and it isn't always cheaper. It's a different tool with different rules. Here's how I help investors use it to build a portfolio one property at a time.

DSCR stands for debt service coverage ratio. The lender compares the property's monthly rent to its full monthly payment: principal, interest, property taxes, insurance and any HOA dues (often shortened to PITIA).