Why Multifamily Operators Are Leading the Next Wave of Housing Development

Build-to-Rent (BTR) has moved from an emerging category to an institutional growth engine. The biggest opportunity? Multifamily operators are uniquely positioned to lead this massive shift.

In this recorded webinar, LendingOne CEO Matthew Neisser and Managing Director Jaime Arouh break down the BTR landscape. They provide a clear roadmap for how existing multifamily teams can successfully leverage their operational strengths, acquisition playbooks, and construction expertise to scale into this high-growth sector.

In this recording, you will get a detailed breakdown of the market forces, strategies, and financing structures currently driving the Build-to-Rent revolution.

Meet the Speakers

Matthew Neisser

Chief Executive Officer

Jaime Arouh

Managing Director

Leverage LendingOne’s BTR Financing Expertise

Backed by a leading global asset management firm, the LendingOne Institutional Group are experts in real estate finance—from understanding the complexities of high-value deals, to providing customized financing solutions for single-family rentals (SFR), to supporting comprehensive BTR portfolios. You can be confident that you’ll have the financial resources you need with one of the leading specialty mortgage providers in the country.

Key Benefits

Discover the key differentiators that set us apart, providing you with expert real estate finance solutions that scale:

  • 5-, 7-, and 10-Year Term Options
  • BTR Aggregation/Reno Facilities and SFR Portfolio Term Loans
  • Direct Lender, Backed by a Leading Global Asset Manager
  • Customized Non-Recourse Financing
  • $100M+ Loan Capacity

Interested in Learning More? Contact Us Today!

Key Takeaways

  • DSCR loan interest rates depend on borrower experience, credit profile, property specifics, market risk, and loan terms.
  • Investors with strong financials and track records typically secure lower rates.
  • Property condition, location, and loan structure (LTV, DSCR ratio, term type) all influence pricing.
  • Optimizing your profile and working with a knowledgeable lender can help lower your interest rate.
  • Use a Real Estate Loan Calculator to model how rate changes affect your returns.

The rising popularity of DSCR (Debt Service Coverage Ratio) loans among real estate investors has drawn attention to how these loans are priced. Unlike traditional loans that rely heavily on personal income verification, DSCR loan interest rates are based on the income generated by the rental property itself.

But while the underwriting process may differ, the question remains: What determines your interest rate on a DSCR loan?

In this article, we’ll explore the primary factors lenders evaluate when setting DSCR loan interest rates and what you can do to qualify for the most competitive terms.

What Is a DSCR Loan?

A DSCR loan is a type of real estate loan that uses a property’s rental income to determine a borrower’s ability to repay. Rather than analyzing personal income or tax returns, lenders use the DSCR ratio to assess loan eligibility.

This ratio is determined by taking the total net operating income and dividing it by total annual debt payments. With this number, the property’s DSCR is assessed. 

  • DSCR > 1: This means the property has positive cash flow and income exceeds debt so the property can cover its own expenses. 
  • DSCR = 1: This means the property is breaking even and income matches debt, so the property is not earning or losing money each month. 
  • DSCR < 1: This means the property has negative cash flow and income falls short of debt, so the property is not able to cover its own expenses monthly. 

Interest rates on these loans play a critical role in profitability, especially for long-term buy-and-hold strategies. You can explore rate impacts using our DSCR calculator. 

Key Factors That Influence DSCR Loan Rates

Investor Experience Level

Lenders typically reward seasoned investors with better pricing. Why?

Experience helps reduce default risk. Investors with multiple successful projects under their belts are seen as more capable of managing cash flow, handling maintenance issues, and responding to market shifts.

Factors that can help lower your rate:

  • Track record of 3+ completed deals
  • Ownership of multiple stabilized rental properties
  • Documentation showing strong tenant performance and low vacancy rates

At LendingOne, we work with investors of all experience levels, providing the most competitive rates on DSCR loans. Learn more about how we calculate DSCR rates by speaking with a loan officer. 

Credit Score

Although DSCR loans emphasize property performance, your personal credit score still affects pricing. Most lenders require a minimum score around 660–680, but top-tier rates are usually reserved for borrowers with scores above 720.

Here’s how credit score can influence your DSCR loan rate:

  • 720+: Access to premium rate tiers
  • 680–719: Mid-range pricing with standard leverage
  • Below 680: Higher rates or lower LTVs

Why does credit still matter? Even in asset-based lending, your score signals your overall financial responsibility and risk tolerance to the lender.

Property Type and Condition

The type and condition of the property being financed can significantly impact your rate.

  • Property Type: Single-family rentals (SFRs) tend to receive better pricing than short-term rentals (STRs), multi-unit properties, or mixed-use assets. Why? SFRs are easier to underwrite and typically have more predictable rental income streams.
  • Condition: Properties in stabilized condition that are fully leased, income-producing, and require minimal rehab, are less risky to lenders. In contrast, properties needing repairs or repositioning may come with rate adjustments due to projected vacancy, maintenance costs, and renovation risk.
  • Location and Marketability: Properties in high-demand, stable neighborhoods are considered more liquid and carry less pricing risk than homes in remote or oversupplied markets.

Ultimately, lenders assess the likelihood that the property can generate consistent rental income and retain value over time as a key component to determining the interest rate offered to investors on a DSCR rental loan. 

Market and Geographic Risk

Not all markets are created equal. DSCR loan pricing may vary based on the property’s location and the perceived risk of that region.

Considerations include:

  • Vacancy Rates: Areas with high vacancy rates may require rate cushions.
  • Insurance Costs: In coastal or disaster-prone regions, high insurance premiums can reduce cash flow and affect DSCR ratios.
  • Market Trends: Lenders favor regions with stable population growth, job creation, and rental demand.

For example, a rental property in Florida may be priced differently than a similar one in Ohio due to market volatility and saturation levels.

Loan Terms and Leverage

DSCR loan rates are also shaped by how the loan is structured. Variables include:

  • Loan-to-Value (LTV): Lower LTVs (65–70%) are seen as less risky and may receive more favorable rates than higher leverage loans (80%+).
  • DSCR Ratio: A higher ratio (1.25x or more) indicates stronger cash flow and may qualify for better pricing.
  • Loan Structure: Interest-only (I/O) loans may come with a premium. A 30-year fixed-rate loan offers long-term stability but often at a higher cost than a 5-year ARM.
  • Prepayment Penalties: Borrowers willing to accept a prepay penalty can often secure better pricing.

LendingOne offers investors high leverage for DSCR rental loans up to 80% LTV and flexible loan structures designed to meet the needs of the individual borrower. Our suite of loan products covers both short-term vacation rental properties to long-term holds. 

What You Can Do to Qualify for a Better Rate

Looking to reduce your interest rate? Start by strengthening the fundamentals:

  • Improve your credit: Pay down revolving debt, avoid late payments, and monitor credit utilization.
  • Build experience: Track and document previous rental investments, even small ones.
  • Stabilize your property: Present clean rent rolls, occupancy history, and lease terms.
  • Lower your LTV: A larger down payment can yield better pricing.
  • Optimize DSCR: Improve rental income or reduce expenses to raise your debt coverage ratio.

Using a lender who specializes in DSCR loans can also make a difference. These lenders understand investor-specific goals and often offer flexible rental loan options with tailored underwriting and lower rates. 

Final Thoughts on DSCR Loan Rates

There’s no one-size-fits-all interest rate for DSCR loans. Lenders weigh a range of risk-based criteria, from borrower history to property performance and market volatility.

By understanding these factors and preparing accordingly, investors can significantly improve their loan terms and ultimately, their returns.

Ready to explore your options? Learn more about DSCR loans or see what rate you qualify for with our DSCR Calculator.

Key Takeaways

  • Advanced strategies like BRRRR, portfolio financing, and geographic diversification help investors scale efficiently while managing risk through systems-oriented approaches.
  • Hard money lenders provide 10-14 day funding versus 30-60 days from traditional banks, with flexible underwriting and customizable terms that enable faster deal execution.
  • Strategic partnerships and syndications allow investors to pool resources and expertise, while clear exit strategies like 1031 exchanges and cash-out refinances maintain investment momentum.
  • Legal structures such as LLCs and trusts protect personal assets and simplify portfolio management as investors transition to larger multi-unit properties.

Real estate investment strategies are key to growing your portfolio successfully. These days, you’ll need to consider more than just the traditional methods of buying, reselling, or holding properties. Successful real estate investors use data-driven methods to identify and manage risk, as well as diversify across markets and asset types.

As real estate investments have grown more complex, less traditional methods of financing have become increasingly popular and necessary. Hard money lending, for example, offers more flexibility and faster funding speeds that few traditional banks can match. As a result, investors can secure and close on deals more quickly.

This article explores advanced strategies for real estate investment, such as buy, refurbish (or rehab), refinance, rent, and repeat (BRRRR) and portfolio financing. Integrating these into your own strategic planning can allow you to identify more opportunities, reduce risk, and maximize returns.

Strategy Matters in Real Estate Investing

Implementing the right real estate investment strategy can help you stand out as a successful investor and scale effectively.

Strategies must balance the ability to identify opportunities with managing the risk of potential returns. And, scaling long-term can otherwise be challenging without the proper planning for capital structure, access to funding, and risk management.

Instead of simply buying and holding real estate, you should focus on building systems with long-term growth in mind.

Some investors have found that pursuing more deals can stretch them thin and increase risk exposure. But done correctly, building toward long-term growth can actually strengthen your portfolio without adding much material risk. And by having quick access to funding, you can make sure you don’t lose out on opportunistic transactions.

Key Real Estate Investment Strategies for Experienced Investors

Seasoned investors may know that long-term growth requires more than the ability to just buy properties. You must factor in scalable growth. You should consider advanced strategies like portfolio financing, leveraging capital, BRRRR, and diversification.

These strategies can help you expand efficiently and intelligently, without expending too much capital or taking on too much risk. Done correctly, you can even use these strategies to uncover new markets and enhance profitability.

Unlocking Growth With Portfolio Financing

Portfolio financing can give real estate investors the ability to use a single loan to finance multiple properties. This is especially useful if you manage large portfolios of properties. It can simplify finances and administrative overhead since it eliminates the need to track multiple mortgage payments.

It can also allow you to secure more favorable loan terms. In comparison to traditional financing, portfolio loans can even save time, as they streamline underwriting processes. This can enable you to expand and close deals even more quickly than individual financing would otherwise allow.

Portfolio financing is an effective strategy for refinancing, consolidating debt, and freeing up liquidity to be used on new deals. This type of financing is offered by many hard money and private lenders.

Leveraging Capital for Faster Growth

Leverage is a controlled way of borrowing money. The funds are then used to generate a larger amount of returns with minimal risk. That said, leverage is dependent on fast funding speeds and flexible approval criteria and loan terms.

This means private and hard money lenders tend to be more favorable when compared to traditional lenders. Through private and hard money lenders, you’re more likely to move quickly and acquire deals traditional banks would not finance.

Traditional loans may offer more competitive interest rates and fees. But, hard money loans can prevent you from losing the ability to secure a highly profitable real estate investment.

The potential returns could far outweigh any savings obtained from a lower interest rate. However, some investors do use a combination of traditional and hard money financing to maximize profitability.

Scaling With the BRRRR Strategy

The BRRRR strategy involves buying, renovating, refinancing, and renting property and repeating those steps with another piece of real estate. It is one of the more popular methods used by investors to build wealth.

The properties being obtained are usually in a condition not suitable or eligible for traditional bank financing. So, BRRRR typically relies on hard money financing to provide the funding needed to renovate, stabilize, and turn the property into a viable long-term rental.

Scaling BRRRR requires the ability to manage multiple projects simultaneously. This requires:

  • Expertise in managing budgets.
  • A team of reliable contractors.
  • Financing partners who can provide funding to cover unexpected expenses.

When managed effectively, BRRRR can provide a consistent stream of capital, which can further increase equity and income.

Diversification Strategies Across Markets

Real estate markets each have their own unique risks and opportunities. For this reason, experienced investors often diversify with deals in multiple geographic locations as a hedge against real estate market instability.

Each location may have its own nuances. So, investors look for indicators of a growing market, including strong job growth, favorable rent-to-price ratios, and population growth. Investing in emerging and undervalued markets also allows for smoother returns across economic cycles.

Partnering with the right hard money lender can be key here. They’re more likely to understand the importance of being able to provide quick access to funding.

Some may even provide resources you can use to analyze various market data, like employment trends and rental and new construction rates. Traditional banks, by comparison, may not have the resources or expertise to guide local market trends.

Transitioning to Multi-Unit and Mixed-Use Properties

While single-family rentals offer simplicity, expanding to multi-unit and mixed-use properties can significantly grow cash and equity. Having an understanding of SFR versus multifamily rent growth can highlight why this is the case.

Investors should be aware that these properties typically:

  • Have larger down payment requirements.
  • Need access to sufficient funding due to larger and more costly renovation needs.
  • See greater competition, which further highlights the need for access to flexible funding.

Hard money financing can bridge all of those gaps. It provides short-term funding solutions to allow investors to acquire and renovate properties before refinancing them to permanent debt.

For example, an investor purchases a 20-unit building using a hard money loan to acquire the property. They also use the loan for repairs and renovations. Then, before paying the loan off, they replace it with a long-term debt-service coverage ratio (DSCR) loan once the property is stable.

Using Syndications and Strategic Partnerships

Forming partnerships or joining groups of other investors can allow you to share and reduce risk. You can pool capital, knowledge, and resources to close deals you otherwise wouldn’t have the capability of doing.

Forming a partnership with a hard money lender can give you access to a flexible and reliable source of funding. This can allow you to get the most suitable financing structure to accommodate contributions in shared ventures.

Many hard money lenders may also have teams of legal and tax professionals. In a partnership, you typically gain access to guidance from these professionals. For example, they can offer resources on maximizing profits while still ensuring compliance with tax rules and regulations.

Exit Strategies That Unlock Future Growth

Successful investors typically have a clear exit strategy in mind for when markets shift out of their favor. This enables them to quickly access equity for new opportunities. Some strategies to consider include:

  • 1031 exchanges: Lets you defer capital gains taxes to preserve greater liquidity, which can be used to further grow profits.
  • Cash-out refinances: Allows for equity to be converted into funds that can be used as capital, without requiring a property sale.
  • Equity recycling: Allows you to use equity from a property to fund another investment without having to sell the property.

As with any exit strategy, timing is a key factor to success. A partnership with the right hard money lender can provide the financing needed to bridge the timelines between acquisition and resale. This can enable you to continuously invest and close deals. 

Using Trusts and Legal Structures for Asset Protection and Legacy Planning

Trusts and legal structures, like real estate investment trusts (REITs) or limited liability companies (LLCs), can protect assets and simplify property management.

For example, using a trust or legal structure can help prevent your personal assets from being seized due to default. It can also streamline portfolio administration as investors acquire more properties, which can save time on tax reporting.

Trusts can further serve as a planning tool. This may eliminate the need to go through probate and allow generational wealth to be preserved.

Financing for Scalable Real Estate Investing Strategies

Finding suitable financing can have a critical impact on how quickly investors can grow. Compared to traditional banks, private lenders like LendingOne can minimize challenges related to loan requirements, funding speed, and underwriting flexibility.

LendingOne specializes in flexible financing solutions that can be tailored to each investor’s needs. This includes fast funding speeds, customizable loan terms, and flexible approval criteria. LendingOne can even assist with all types of investments, including BRRRR projects and portfolio financing.

To see the advantages and disadvantages of each lender type, below is a quick comparison of typical features.

Criteria Traditional Banks Private Lenders
Funding Speed 30–60 days 10–14 days
Primary Underwriting Criteria Income Property and investor experience
Underwriting Flexibility Limited High
Amount of Required Paperwork Extensive Low
Customizable Loan Terms Limited Yes

Final Thoughts on Real Estate Investment Strategies

Building a real estate portfolio with sustainable growth requires more than just the ability to identify good opportunities.

It’s essential to have reliable access to capital and the capacity to implement smart business strategies. This includes diversification, BRRRR scaling, engaging in strategic partnerships, or portfolio financing.

Beyond employing smart tactics, you’ll want access to the right financing partner that can offer the most suitable funding structure. LendingOne’s experience, nationwide funding abilities, and customizable loan programs identify it as a great fit for investors of all types.

Ready to move forward? Speak to a loan advisor to discuss how LendingOne’s solutions can fit into your investment strategies.

After a historic housing whiplash—rates spiking, volumes sliding, confidence wobbling—the past few months have seen the housing market move into a steadier stretch. Mortgage rates dipping into the low 6s have cracked a key psychological ceiling, coaxing some buyers back even as affordability remains tight.

This October, inventory has continued to steadily climb—pressing especially high in Sun Belt metros—causing price growth in many markets to edge down. The month-to-month moves aren’t dramatic, but the direction is clear: affordability remains strained, demand is uneven, and supply is gradually accumulating.

Shifts aren’t uniform: some metros are seeing sharper corrections while others remain resilient. We are now in a market where incremental shifts in inventory and pricing matter more than momentum, and where patience and discipline are key. 

For buy-and-hold investors focused on cost control and finding a good deal in their local market, the coming year may offer the best chance in years to buy into a market that’s still settling. Every month, investors are hit with a flood of new housing market data points to consider. Each data point helps paint a picture of the current state of the U.S. housing market, but there are a few signals that are essential for savvy real estate investors to pay attention to. 

To cut through the noise and help you stay up to date on what’s happening in today’s housing market, here’s LendingOne’s October 2025 market recap.

Inventory: Active listings continues to build—creating more buying opportunities 

Since the homebuying frenzy of the pandemic years, transactions have slowed substantially, resulting in year-over-year increases in active inventory across most U.S. markets. 

National active listings in September 2025 were 17% higher than the year before. Still, supply was 10% lower than in pre-pandemic September 2019. The uptick highlights that conditions have eased somewhat over the past year, even as inventory remains historically constrained overall.

12-month change in active housing inventory for sale: Shift between September 2024 and September 2025

Inventory levels continue to rise year-over-year because higher mortgage rates and affordability challenges have cooled buyer demand, leaving homes on the market longer. In many Sun Belt metros, where new construction has surged in recent years, fresh supply is also adding to active inventory levels.

Among the largest 200 metros, these are the five with the highest year-over-year inventory gains relative to September 2024:

  1. Asheville, NC: +71.7%
  2. Durham–Chapel Hill, NC: +49.9%
  3. Washington–Arlington–Alexandria, DC–VA–MD–WV: +48.7%
  4. Fayetteville–Springdale–Rogers, AR: +48.6%
  5. Olympia–Lacey–Tumwater, WA: +47.9%

Single-Family Home Prices: Softening continues amidst affordability squeeze

Nationally, single-family home prices were nearly flat from September 2024 to September 2025, up just 0.3% compared to a 2.8% gain a year earlier. The softening reflects the affordability squeeze: mortgage rates remain elevated, price levels are still historically high, and more supply is coming online.

One-year change in single-family home prices by metro

Sun Belt markets, where supply has grown the most, are adjusting as local incomes struggle to keep pace. By contrast, the Northeast and Midwest remain supply-constrained, helping to stabilize prices and, in some cases, support modest gains—though softening persists in these markets as well.

These are the top 10 U.S. metros for year-over-year single-family price growth:

  1. Peoria, IL: +9.0%
  2. Erie, PA: +7.0%
  3. Rockford, IL: +6.8%
  4. Utica, NY: +6.6%
  5. Appleton, WI: +6.6%
  6. Canton, OH: +6.3%
  7. Youngstown, OH: +5.5%
  8. York, PA: +5.3%
  9. Scranton, PA: +5.3%
  10. Syracuse, NY: +5.1%

Rent Growth: Softened but stable—especially for single-family rentals

While home price growth continues to weaken, rent growth is a bit more resilient—especially among single-family rentals. 

In September 2025, overall rents were up 2.4% year-over-year, with multifamily units rising 1.7% and single-family rentals leading at 3.2%. 

Cooling growth reflects the comedown from pandemic-era peaks, but steady tenant demand and solid occupancy suggest stability ahead—particularly in metros with strong job markets and limited overbuilding. Strained home affordability may also be pushing more households into the rental market.

Year-over-year shifts in U.S. rent growth

”Rental demand has remained resilient—rising household formations and affordability constraints continue to funnel renters toward single-family homes,” LendingOne CEO Matthew Neisser said in the Q3 market report. “For investors focused on buy-and-hold strategies, the fundamentals still look supportive.”

Single-family builder sentiment ticks up, despite market headwinds

This month’s government shutdown delayed the release of September permit data, leaving a gap in one of the market’s usual supply signals. Still, other indicators suggest cautious optimism from builders.

The National Association of Home Builders (NAHB) / Wells Fargo Housing Market Index (HMI) is a monthly survey that asks builders to rate current sales of new single-family homes, sales expectations for the next six months, and the traffic of prospective buyers. Readings above 50 indicate that more builders view conditions as “good” than “poor.”
The HMI reading rose to 37 in October, up five points from September and the highest reading since April. Confidence in current sales conditions climbed to 38, sales expectations for the next six months surged to 54, and prospective buyer traffic edged higher to 25.

U.S. homebuilder sentiment ticks up to a 6-month high

That optimism, however, comes with a caveat: price cuts remain widespread. Nearly four in ten (38%) builders reported cutting prices in October and the average price reduction rose to 6%. The last time builders reduced prices by 6% was in October 2024.

Incentives are also pervasive, with 65% of builders deploying them. The result is a market where confidence is inching up, but competition for buyers is forcing concessions.

Buyer Leverage: Listings across the South and Mountain West are lingering

Perhaps the clearest sign of a slowed housing market is how long homes are taking to sell. 

Nationally, the typical days on market climbed from 41 in September 2021 to 62 in September 2025. The slowdown is even more pronounced in markets across the South and Mountain West, where typical listings in September 2025 sat for more than 100 days—compared with fewer than 30 days during the pandemic frenzy.

In several Northeast and Midwest metros, homes are still moving relatively quickly, with typical days on market holding near pre-pandemic norms.

Typical days on market in September 2025

For buyers, longer timelines mean more leverage: the ability to negotiate price reductions, request concessions, or wait out sellers under pressure. For investors, it signals that deal opportunities remain in once-overheated markets.

Big Picture

October’s housing data reinforces a theme of divergence. Nationally, inventory is climbing and price growth has slowed to nearly flat, but smaller, affordable metros in the Midwest and Northeast continue to see meaningful appreciation.

Rental demand remains a bright spot, especially for single-family units, offering investors stability even as home sales cool. Builder sentiment is recovering slightly, though discounting underscores the ongoing affordability crunch. And with listings lingering in the South and Mountain West, buyers are gaining negotiating power not seen since before the pandemic. 

For investors, the message is clear: this is a market that demands local focus, disciplined underwriting, and a sharp eye for regional differences.

The past few years have been some of the more challenging in recent memory for real estate investors. Mortgage rates rose to levels we hadn’t seen in two decades, sales volumes hit decade lows, and investor confidence was tested due to the lack of inventory. Many landlords and flippers shifted into “wait-and-see” mode, holding cash on the sidelines as uncertainty loomed. 

Now, as we move through Q3 2025, the landscape is starting to shift. Mortgage rates have pulled back from their highs, falling into the 6s. That has broken through a key psychological barrier and is beginning to coax some buyers back into the market.

Inventory is rising in some markets, and opportunities are opening up in select regions. Builders are increasingly leaning on investors to help move homes. This is neither the free-for-all market of 2021 nor the fully frozen market of 2023. We’re in a middle ground—a transitional phase where disciplined investors can find real advantages. 

For those willing to do the work on underwriting, financing, and market selection, the next 12 months will present some of the best opportunities in years. At LendingOne, we have a front-row seat to these shifts, working with thousands of active investors across the U.S. Here are the key dynamics I see shaping today’s housing market and what they mean for your investment strategy.

Deal Flow Is Picking Up Again

One of the clearest signals this quarter is that activity is rebounding with consumers.. Purchase and refinance applications have risen as mortgage rates slipped back into the low 6s. That small shift matters: buyers who had been sidelined in frustration are starting to re-engage. 

For investors, this means more chances to find motivated sellers—and in some cases, buyers willing to transact at reasonable terms. While transaction volume remains below pre-2020 levels, the bottoming out appears to be behind us.

Regional Divergence Remains Wide 

Not all markets are moving in lockstep. Florida, especially parts of Southwest Florida, continues to experience more pronounced weakness. Inventory levels there are heavier, and sellers are facing more pressure to cut prices. 

Meanwhile, the Midwest and Northeast remain relatively stable, offering steadier rent and occupancy trends. Out West, deeper suburban areas of Phoenix, Dallas, and Austin still face builder pullbacks and higher unsold inventory, creating both risk and opportunity depending on an investor’s entry point. 

The lesson is simple: market selection matters more than ever.

Builders Are an Increasing Source of Opportunity 

Homebuilders are recalibrating strategies, and investors are directly benefiting. From bulk deals on finished homes to marketplaces like Lennar’s new investor platform, we’re seeing more opportunities to acquire product straight from the builder. 

This trend isn’t limited to institutional players. Even smaller investors can benefit by building relationships with local and regional builders who may be motivated to move inventory before year-end. For flippers and landlords alike, builder channels could become one of the more compelling ways to source deals in the coming quarters.

Financing Conditions Offer Some Breathing Room 

While capital is not as low as it was during the Covid era, it is more predictable than it was a year ago. The Federal Reserve’s recent decision to lower interest rates and outline a clear path forward has provided buyers with significantly more confidence in both rates and the overall market. Rates in the 6s have changed the mindset for both buyers and sellers. At LendingOne, we’re seeing stronger loan demand as investors move off the sidelines. 

Rental Market Dynamics Still Favor Long-Term Holders 

Despite the noise around the for-sale housing market, rental demand has remained resilient. Rising household formations and affordability constraints continue to funnel renters toward single-family homes. Build-to-rent remains a strong segment, although much of the new supply is concentrated in specific metropolitan areas. 

For investors focused on buy-and-hold strategies, the fundamentals still look supportive. Rent growth has cooled from peak levels, but occupancy and tenant demand are holding firm—particularly in markets with steady job growth and less overbuilding.

Positioning for 2026 

Increasing supply and reduced rates will create openings for disciplined investors. The winners will be those who stay patient, keep capital flexible, and lean into opportunities created by regional imbalances and motivated sellers, particularly at the end of the year. 

At LendingOne, our focus remains on helping investors move with confidence. Whether it’s financing a flip, a rental portfolio, or a new acquisition strategy, we’re here to provide the capital and partnership needed to execute in this environment. 

The past few years have reminded us that cycles always turn. As we head into 2026, I believe those who stay active today—selectively and strategically—will be best positioned to benefit from the next upswing.

In the last few months, national home price growth has nearly plateaued, transactions have remained moderate, and active inventory levels have continued to increase. But for strategic real estate investors, these same trends are windows of opportunity for great deals—whether in Sun Belt metros where supply has surpassed pre-pandemic 2019 levels, or in the Northeast and Midwest where tighter markets continue to support steady home price appreciation.  

Affordability challenges are front and center in today’s housing market, with elevated mortgage rates and high home prices continuing to weigh on demand, even as rates recently dipped to their lowest level of 2025 in September. However, those same headwinds are producing more motivated sellers and openings for single-family real estate investors.

Every month, investors are hit with a flood of new housing market data points to consider. Each data point helps paint a picture of the current state of the U.S. housing market, but there are a few signals that are essential for savvy real estate investors to pay attention to. 

To cut through the noise and help you stay up to date on what’s happening in today’s housing market, here’s LendingOne’s September 2025 market recap.

Inventory: Buyers Gain Leverage in Select Metros

Active listings have rebounded substantially from pandemic-era lows, though national inventory remains 11% below pre-pandemic 2019 levels. However, the real story lies in regional variation.

Sun Belt boomtowns like Cape Coral and San Antonio have seen inventory bounce above pre-pandemic norms, giving buyers more leverage—especially with builders cutting deals to move unsold spec homes. Among the nation’s 200 largest housing markets, 80 metro areas now have active inventory above 2019 pre-pandemic levels. 

By contrast, supply in the Northeast and Midwest remains tight, keeping sellers in control. In total, 24 major metros are still at least 50% below their 2019 inventory levels.

Among the largest 200 metros, these are the five with the highest inventory levels relative to August 2019:

  1. Killeen-Temple, TX: 93.9%
  2. Punta Gorda, FL: 91.7%
  3. Colorado Springs, CO: 88.0%
  4. Huntsville, AL: 87.1%
  5. Waco, TX: 86.7%

Among the largest 200 metros, these are the five with the lowest inventory levels relative to August 2019:

  1.  Bridgeport-Stamford-Danbury, CT: -75.8%
  2.  Peoria, IL: -74.2%
  3.  Hartford-West Hartford-East Hartford, CT: 72.6%
  4.  Norwich-New London-Willimantic, CT: -70.3%
  5.  Champaign-Urbana, IL: -67.5%

Single-Family Home Prices: Broad Softening but Not Uniform

Nationally, single-family home price growth from August 2024 to August 2025 was nearly flat at +0.3%, a sharp deceleration from the +3.1% pace recorded from August 2023 to August 2024. The stall reflects the squeeze of affordability—mortgage rates remain elevated, price levels are still historically high, and more listings are coming online in many metros. 

Sun Belt markets, where supply has grown the most, are adjusting as local incomes struggle to keep pace. By contrast, the Northeast and Midwest remain supply-constrained, helping to stabilize prices and, in some cases, support modest gains.

These are the top five U.S. metros for year-over-year single-family price growth:

  1. Peoria, IL: +8.0%
  2. Rockford, IL: +6.7%
  3. Appleton, WI: +6.5%
  4. Erie, PA: +6.3%
  5. Utica, NY: +6.2%

New Construction: Permits Signal Builder Caution

Unsold completed homes reached their highest level since 2009—the July figure (121,000 unsold completed new homes) is the highest level since July 2009 (126,000).

Because of this buildup, single-family and multifamily permitting slowed in August, reflecting a cautious stance among builders.

Year-over-year (August 2024 to August 2025) change for residential permits:

  • Single-family homes: -11.5%
  • Multifamily (2 to 4 units): -7.0%
  • Multifamily (5 units or more): -9.6% 

Nationally, permit volumes remain above pre-pandemic lows but are well off peak 2021 levels, showing that builders are moderating to prevent a bigger inventory overhang. The pullback is sharpest in Sun Belt metros, where affordability pressures and resale competition have weighed most heavily on demand.

Mortgage-Free Ownership: A Growing Cushion

The 2024 American Community Survey results were released by the U.S. Census Bureau this month, and LendingOne’s analysis revealed a striking demographic shift that continues to reshape the market: a record-high 40.3% of U.S. homeowners are now mortgage-free. 

That’s up from 39.8% in 2023 and 32.8% in 2010.

Demographics are a main driver of the rise. The massive Baby Boomer generation has aged into retirement, and more than half (54%) of mortgage-free homeowners are now over 65 years old. 

This dynamic has created a buffer for equity-rich homeowners, adding a layer of stability to the broader U.S. economy even as affordability remains strained.

Investor Spotlight: Fix-and-Flip Sentiment Holds Steady

Home flipping activity fell sharply after the Pandemic Housing Boom ended in 2022, as higher rates and tighter margins pushed many operators to the sidelines. But Q3 2025 data from the LendingOne–ResiClub Fix and Flip Survey shows the market has stabilized into a new phase: cautious, yet committed.

More than half of flippers (56%) describe their local markets as strong, and 88% still plan at least one project in the next 12 months.

Regional differences are very stark. While current market sentiment is lowest for flippers based in Sunbelt markets, these investors are also optimistic: 41% of flippers in the Southwest and 42% in the Southeast expect their market to strengthen over the next 12 months—the highest among all regions. 

LendingOne analysts believe this suggests that investors see the current softness as temporary, with room for recovery as excess supply clears and demand stabilizes.

Big Picture

The September 2025 housing market has made one thing clear to investors: opportunities are still there, but they’re no longer spread evenly and require sharper targeting.

In the Sun Belt, elevated inventory levels have tipped the balance slightly toward buyers, while falling permit activity shows builders are pulling back to avoid adding more supply into markets already digesting a backlog of homes. 

At the same time, supply in the Northeast and Midwest remains constrained, keeping modest upward pressure on prices—though even there, the pace of growth is beginning to flatten.

Key Takeaways

  • DSCR loans qualify borrowers based on property rental income rather than personal income, ideal for self-employed investors.
  • Current rates average mid-6% to 7% with 20-25% down payments and minimum credit scores around 660-700.
  • These loans have higher rates and prepayment penalties than conventional mortgages but offer faster approvals and LLC ownership.
  • These loans work best for stabilized 1-4 unit rental properties held long-term, not owner-occupied homes.

If you’re a landlord or considering purchasing a rental income property, consider a debt service coverage ratio (DSCR) loan to fund your next purchase.

A DSCR loan is specifically designed to finance rental properties and can be easier to qualify for than a conventional mortgage, as it leverages the property’s cash flow instead of a buyer’s income, tax returns, and W-2.

This article will cover the finer points of DSCR loans, including their requirements, qualification process, and flexibility for real estate investors.

What is a DSCR Loan?

DSCR loans are mortgages secured by the property’s rental income and do not require the buyer to provide the same documentation needed with a mortgage for owner-occupied properties.

This feature is especially helpful for self-employed investors who may not have a conventional income stream or have been challenged to obtain financing through traditional banks.

DSCR loans are specifically designed for residential income-producing properties and are quickly becoming the preferred option for investors purchasing income properties. Still, there are some considerations regarding DSCR loans:

  • Only properties with one to four units are eligible for DSCR lending, as additional units in the building would classify it as “multi-family.”
  • Most DSCR lenders prefer turnkey or stabilized properties, though some allow light rehab if the property is leased or stabilized quickly.
  • Lastly, the property must be a business asset or income investment, meaning the owner cannot reside at the address.

 

How DSCR Loans Are Calculated

DSCR loans are based on a calculation that assesses the property’s potential to cover its expenses. The calculation divides the property’s net operating income (NOI) by its total debt service (TDS) to obtain a number less than, greater than, or equal to 1.0.

DSCR = Net Operating Income (NOI) / Total Debt Service (TDS)

Net operating income is calculated by subtracting the total operating expenses from the gross rental income. Total debt service refers to the sum of all debt-related costs that the property is required to pay.

The DSCR ratio is what tells the borrower and lender how much income the property is generating to cover (or not cover) its own expenses.

  • DSCR > 1 means the property is generating enough income to cover its debt.
  • DSCR = 1 means the property is just breaking even with enough income to cover its debt.
  • DSCR < 1 means the property isn’t generating enough income to cover its debt, posing a greater risk for lenders.

For Example:

DSCR = $150,000 / $100,000 = 1.5

This means the property generates $150,000 in income, with total expenses equal to $100,000. This results in a DSCR of 1.5, so the property yields 50% more income than what’s needed to cover its debt, making it a more acceptable threshold for a lender to consider financing.

DSCR Loan Requirements: What Lenders Look For + Refinance Outlook

Recently, rates have eased into the mid-6% to 7% range on average, and liquidity from non-agency or non-QM channels has improved.

At the same time, rents are increasing unevenly by metro area, and insurance costs remain elevated in some counties. Key factors driving uneven rent increases can include:

  • Supply and demand.
  • Migration patterns.
  • Construction costs.
  • Location desirability.
  • Inflation.
  • Post-pandemic changes.

All of this is reflected in today’s DSCR underwriting. Lenders are pricing more competitively than in previous years, but they’re also scrutinizing expenses such as taxes and homeowners’ insurance that impact cash flow.

Core DSCR requirements (what you’ll typically need) and LendingOne’s impact:

  • Property & use: 1-4 unit single-family rentals (SFRs), townhomes, condos, and planned unit developments (PUDs); investment use only (non-owner-occupied).
  • DSCR threshold: Many programs target a DSCR of ≥1.10-1.20, depending on the credit; some offer options for break-even or even sub-1.0 DSCR with compensating factors.
    • Example: LendingOne’s core grid lists 1.10-1.20 minimums by FICO; separate programs advertise flexibility for break-even and negative cash-flowing properties. Always confirm program-specific guidelines.
  • Leverage: This is program-dependent, but LendingOne, for example, offers up to 80% LTV on purchase or rate/term refi; up to 75% LTV on cash-out.
  • Credit & experience: Program minimums vary; one representative grid shows a minimum FICO score of 680, with stronger credit resulting in a lower required DSCR and potentially reduced reserve needs. Some programs require experience with existing investment properties.
  • Reserves & payment structure: Expect reserves (e.g., ~9 months PITIA), with portions sometimes collected at closing and potential waivers for higher FICOs. Prepayment options often include 1-5-year step-downs, which is vital if you plan to refinance.
  • Appraisal & rents: Full appraisal with 1007 rent schedule; lenders qualify using the lesser of actual or market rent (caps may apply).
  • Insurance & escrows: Escrows for taxes and insurance are standard. Hazard insurance (and flood, if applicable) is required; many lenders also require rent-loss coverage (e.g., six months). Rising premiums, especially in high-risk counties, can tighten DSCR, so get quotes early.

 

DSCR Loan vs. Other Investment Property Loans

Choosing the right loan comes down to how the deal cash flows, how quickly you need to close, and how much documentation you are willing to provide. Of course, this is easier said than done, and verifying many variables can get overwhelming.

This is how DSCR loans compare with other standard options. This table focuses on general patterns across lenders. Terms vary by program and market.

Loan type Qualifying focus Docs & credit Typical LTV & term Rate & fees (relative) Best fit
DSCR Rental loan Property income (DSCR) is more than the borrower’s DTI Appraisal + rent schedule; credit & reserves reviewed ~75–80% LTV; 30-year fixed or ARM; IO options Higher than conventional; lower than most short-term loans Long-term holds when you prefer property-based underwriting
Conventional (agency) investment mortgage Personal income & DTI Full income and asset docs; strong credit needed LTV caps vary by units and purpose; 15–30-year terms Lowest if you fully qualify Lower-cost debt for well-documented borrowers
Bridge loan Asset + exit plan (sale or refinance) Appraisal and BPO; business plan; experience and liquidity Short term (~6–18 months); leverage varies Higher rates and points Fast acquisitions or seasoning before permanent debt
Fix and Flip (rehab) loan After-repair value (ARV) and scope Budget, draws, inspections; experience helps Short term (~12 months); leverage tied to LTC or ARV Higher (construction risk priced in) Buy-rehab-sell or refi to DSCR after stabilization
Portfolio or blanket rental loan Portfolio cash flow (global DSCR) Rent rolls, consolidated financials, entity structure Often up to ~75% LTV; 5–10-year terms (balloon or fixed and ARM) Middle of the pack Operators consolidating multiple rentals under one loan

Disclaimer: This information is provided for educational purposes. Always check the current guidelines, fees, prepayment terms, and local insurance and tax impacts before bidding or refinancing.

Should You Use a Direct Lender, Broker, or Bank for Your DSCR Loan?

When financing a rental, the company you work with can significantly impact the speed, pricing, and amount of paperwork required. This is how the three options differ and when each is most suitable.

What Is a Direct Lender?

A direct lender is the company that funds the loan itself. In plain terms: The lender makes the loan; a broker does not. Brokers act as intermediaries who help you shop with multiple lenders.

How does this play out with DSCR loans? Direct lenders primarily underwrite based on the property’s debt service coverage ratio, order the appraisal and rent schedule, and issue terms directly.

Banks can also be direct lenders, but many DSCR programs are offered by non-bank lenders that specialize in investment properties. Banks engage in mortgage banking — originating, holding, or selling loans.

Example of a Direct Lender: LendingOne

LendingOne is a direct private lender focused on real estate investors, offering DSCR rental loans among other investor products. It lends on non-owner-occupied 1-4 unit properties and provides an online application and borrower portal. For specifics on programs, see DSCR Rental Loans.

Comparing Direct Lenders, Brokers, and Banks

Approval speed

  • Direct lender: Often faster because underwriting, disclosures, and conditions stay in one shop.
  • Broker: Timeline varies; brokers coordinate with a wholesale lender’s underwriting.
  • Bank: Processing may be slower due to more thorough documentation and portfolio or committee reviews.

Loan Variety

  • Direct lender: Deep menu of investor-focused products (DSCR, bridge, flip) within its own credit box.
  • Broker: Broad market access; can shop multiple wholesale lenders for niche scenarios.
  • Bank: Strong for conventional or agency and portfolio products; may have fewer DSCR options.

Rates and fees

  • Direct lender: Competitive for its programs; pricing set in-house.
  • Broker: Can help you compare offers; broker compensation and fees may apply in addition to lender fees.
  • Bank: Often sharp pricing if you qualify under bank or agency rules.

Documentation

  • Direct lender: DSCR loans emphasize property income (from leases and market rent) plus credit, reserves, and entity documents.
  • Broker: Documentation depends on the target lender’s program.
  • Bank: Heavier personal income and DTI documentation for many programs.

How to Decide

  • Choose a direct lender if you want a streamlined DSCR process and clear, program-specific guidance from the funding source.
  • Choose a broker if you want help shopping for multiple DSCR and investor programs with a single intake.

Choose a bank if you easily qualify for conventional or portfolio terms and want potential relationship pricing or servicing under one roof.

 

Financing Options for DSCR Loans

Within DSCR financing, loan structure directly impacts payment stability, cash flow, and when it makes sense to refinance. Here’s what investors should keep in mind:

  • Fixed-rate (usually 30-year): Stable payment for the full term; good for long holds and budgeting. Often starts a bit higher than ARMs; you’d refinance to benefit from future rate drops.
  • Adjustable-rate (5/6, 7/6, 10/6 ARMs): Offers a lower start rate, which is fixed for an initial period; then adjusts with caps. Works when you plan to sell or refinance in 3-10 years or expect rates to ease.
  • Interest-only (IO) periods: Interest only for 5-10 years, then amortizing. Improves near-term cash flow and DSCR; no principal paid during IO; payment jumps when amortization begins. Some lenders size DSCR to the post-IO payment.
  • Term & amortization: 30-year standard; some offer 40-year with an IO period. Confirm which payment (IO vs. post-IO) is used to qualify.
  • Down payment/LTV: Purchases typically have a 75-80% LTV (approximately 20-25% down). Cash-out refinancing often caps lower. Results vary by DSCR, credit, reserves, property, and market.
  • Prepayment: Step-downs are common (e.g., 3-2-1 or 5-4-3-2-1). Match the penalty window to your hold period.
  • Recourse, entity, assumability: Most close to an LLC with personal guarantees; non-recourse exists at tighter terms. Assumability is lender-specific and not always offered.
  • Short-term rentals: Many programs allow STRs but may underwrite to market rent or an average history. Model higher expenses (management, cleaning, vacancy) in DSCR.

 

DSCR Loan Pros and Cons

DSCR Pros

  • Easier qualification for many investors: Underwrites to the property’s cash flow rather than your personal income, tax returns, or W-2s — helpful for self-employed borrowers or those with complex finances.
  • Faster path to scale: Because income docs are lighter, approvals can be quicker than traditional bank mortgages (still subject to appraisal and underwriting).
  • Entity-friendly: Allows LLC or partnership ownership, making it straightforward to buy with partners and separate business from personal assets.
  • Investment-focused: Explicitly designed for non-owner-occupied properties, aligning the loan with portfolio goals.

DSCR Cons

  • Higher cash to close: Down payments are often larger than conventional mortgages (and cash-out limits may be tighter).
  • Pricing and fees: Expect higher interest rates, closing costs, and lender fees versus many bank and agency loans due to the risk profile and reduced personal income verification.
  • Prepayment penalties: Many programs include a step-down prepayment, which can limit the flexibility of early sale or refinance.
  • Not government-backed: Fewer protections than agency loans; terms vary by lender, and guidelines can change.
  • Cash-flow risk: If rents soften or expenses rise, such as taxes, insurance, or HOA fees, the DSCR can fall below 1.0, increasing the risk of financial stress or foreclosure.
  • Market fit matters: Not ideal for properties with unstable income or in volatile markets where vacancy or rent swings are common.

 

Is a DSCR Loan Right for You?

DSCR loans offer incredible flexibility and are fast becoming the preferred loan vehicle for residential real estate investors today. Working with a lender well-versed in DSCR financing will give you the expertise and options you need to achieve your investment goals.

Ultimately, DSCR loans may be a better option for self-employed investors, investment partnerships, or in scenarios where the property’s income potential comfortably exceeds its expenses.

However, a conventional mortgage may be a more suitable and affordable choice for first-time buyers or anyone who plans to live in the property.

For more information, explore the loans available for your next real estate investment.

CTA button: Speak with a LendingOne Loan Advisor

Frequently Asked Questions

What DSCR Ratio Do Lenders Usually Look For?

Most programs target a DSCR of 1.10-1.25 for standard pricing. Some offer options at or below 1.0 DSCR with stronger credit, lower LTV, or additional reserves.

How Important Is My Credit Score When Applying for a DSCR Loan?

Credit still matters; minimums often fall in the 660-700 range, with better pricing and flexibility above 700. That said, lenders weigh the property’s cash flow more heavily than your personal DTI.

Are DSCR Loans From Hard Money Lenders More Expensive Than Traditional Lenders?

Generally, yes. Short-term or “hard money” sources tend to price higher rates and points than established non-bank DSCR lenders or banks, trading cost for speed and flexibility.

What Is the Lowest Down Payment for a DSCR Loan?

Purchases typically require a 20-25% down payment, resulting in a 75-80% loan-to-value (LTV) ratio. Cash-out refinances usually cap at a lower LTV, and higher LTV (if available) often require stronger DSCR and credit.

Can I Combine a DSCR Loan With a Rehab or Construction Loan?

Not in one permanent loan. Investors typically use a bridge or fix-and-flip loan for renovations, then refinance into DSCR once the property is stabilized and leased.

Are DSCR Loans Assumable or Transferable Between Entities?

Often not assumable. Some lenders may approve entity changes with consent and updated guarantees, but many notes include due-on-sale and transfer clauses; check your loan documents.

Do DSCR Loans Work With Short-Term Rentals or Airbnb Income?

Many programs allow short-term rentals, but underwriting may use market rent or an average history rather than peak seasonal income. Expect tighter rules on permits, occupancy assumptions, DSCR, and reserves.

During the Pandemic Housing Boom, flipping surged as skyrocketing price appreciation drew investors in. The 2022 interest rate shock ended that frenzy, forcing many newcomers out and leaving more seasoned operators to adapt to tighter margins.

​​In early 2025, our first-ever LendingOne–ResiClub Fix and Flip Survey showed a market still digesting the fallout from the 2022 rate shock. Activity had cooled from the pandemic, but many flippers said they still planned to do deals in 2025.

In today’s article, we’ll share the full results from the LendingOne-ResiClub Fix and Flip Survey for Q3 2025. The flipper survey was fielded from August 20 to September 15, 2025. The results reveal many of the same themes as our Q1 2025 survey—but the story has evolved. 

“Our latest survey reveals a fix-and-flip market that is both resilient and realistic,” says LendingOne CEO Matthew Neisser. “The broader macroeconomic environment, with elevated interest rates, higher inflation, and rising costs for materials and labor, has clearly ended the pandemic frenzy. However, the lack of housing inventory and the ongoing demand for updated homes have created a new landscape for experienced investors. They are continuing to find opportunities, particularly in the Midwest and Northeast, even as they face increased pressures. Meanwhile, flippers in the Southwest and Southeast, while seeing more market softness, remain optimistic about a market rebound. This strategic mindset, combined with a widespread plan to hold a portion of their flips as rental properties, highlights the adaptability of today’s professional flipper in a more challenging, yet opportunity-rich, environment.“

Total Number of U.S. Home Flips by Quarter

Topline Findings 

1. Home Flipper Sentiment and Intent 

Shifts from Q1 2025: 

  • Market sentiment is split but steady compared to Q1: 56% of U.S. home flippers describe their primary market as somewhat strong (44%) or very strong (12%).
  • Expectations for demand have softened: 28% of flippers now anticipate weaker demand over the next year, up from 21% in Q1 2025.

Fix and Flip Activity:

  • A strong majority of flippers (88%) still plan to complete at least one project in the next 12 months.
  • Nearly two-thirds (64%) of flippers plan to convert at least one project into a rental property.

Market Outlook:

  • 64% of survey participants expect the fix and flip market to stay the same (42%) or weaken (22%) in 2025. 
  • Optimism runs the highest in the South: 41% of flippers in the Southwest and 42% in the Southeast expect their market to strengthen over the next 12 months—the highest among all regions.

2. Financial Considerations

Renovation Costs: 

  • Budgets vary widely, but Northeast flippers tend to spend the most, with half (50%) investing more than $100,000 per project.
  • 56% of respondents say kitchen upgrades deliver the best ROI.
  • 41% of U.S. home flippers report a typical margin of 20–29%.

3. The biggest concerns across U.S. markets, according to home flippers 

Organization and timeline stress:

  • Working with contractors continues to be one of the most challenging parts of fix and flip projects (28%), followed by staying on timeline (23%), obtaining financing (21%), and budget management (17%).
  • Two-thirds (66%) of flippers say their projects typically take 4–6 months from purchase to resale. In the Northeast, however—where regulation is heavier—12% report project timelines of 10 months or longer.

Regional variation and pain points:

  • Nationally, competition for properties (28%) and interest rates (27%) are cited as the biggest current challenges. In the Northeast and Midwest, competition is even more acute, with 39% and 37% respectively naming it their top concern.
  • The Midwest is viewed as the strongest region, with 23% of flippers calling their market very strong and 50% calling it somewhat strong.

The Southwest is seen as the weakest region, with 17% describing their market as very weak and 43% as somewhat weak.

How likely home flippers are to conduct a flip in the next 12 months. Q1 vs Q3 comparison.

How flippers describe the current state of their primary fix and flip market. Q1 vs Q3 comparison.

How flippers describe demand for fix and flip properties in their market over the next year. Q1 vs Q3 comparison.

How many projects flippers plan to convert to rentals using the BRRRR method

How flippers see the market evolving over the next 12 months

How flippers describe demand for fix and flip properties in their market over the next 12 months

Average budget flippers report for a renovation project

Profit margins flippers report on completed projects

Renovations that provide the best ROI

Biggest challenges flippers face with fix and flip projects

Timeline of flips from purchase to resale

How flippers describe the current state of their primary market

Biggest challenges flippers face in their current market

Real estate investment can be a marathon, not a sprint, and for Cedric, it was a journey of careful planning, calculated risks, and continuous learning. Alongside his wife Bea, Cedric has built a portfolio of four income-producing properties since 2017, evolving his strategy from a bold, sight-unseen purchase to a meticulously planned approach focused on cash flow and long-term appreciation.

A Bold Beginning: Learning from a High-Risk First Step

Cedric and his wife spent years considering real estate investment, poring over books and resources, before finally taking the plunge in 2017. Their very first transaction was an unconventional one: a tax sale auction. They purchased a property sight unseen, relying only on exterior photos available online.

“We decided to hit the button and hit the gas pedal,” Cedric recalls, describing the competitive bidding process. They won the auction, but the immediate thought was, “Okay, now what?” The property was in rough shape, requiring significant work. Adding to the challenge, they were living in a different state. After a 14-month process to secure a clear title, they sold the property for a profit of approximately $14,000, making a quick decision not to repeat that specific high-risk method.

“It was definitely high risk,” Cedric admits, acknowledging they “got lucky” that it worked out. This initial experience, though profitable, solidified their desire for a more traditional and manageable approach.

Shifting Gears: Embracing Strategic Financing

Following their initial, high-octane purchase, Cedric and his wife pivoted. They decided to leverage their existing knowledge from buying personal residences. Their second, third, and fourth properties, all purchased between January 2020 and February 2025, followed a more conventional path.

Initially, they financed properties in their personal name through traditional, big bank lenders and directly with builders, then transferred ownership to their LLC. However, Cedric recognized the inefficiency of this multi-step process. He sought a direct solution, leading him to LendingOne.

With LendingOne, Cedric was able to secure a DSCR loan, financing his fourth property entirely under his LLC from start to finish. This streamlined approach allows him to build his portfolio more efficiently.

Today, all four of his properties are fully occupied rentals, managed by a dedicated property management company.

Navigating Obstacles with Tenants

Cedric has faced his share of challenges. The most significant occurred with a tenant in their first conventionally purchased property in 2020. After nine months of smooth sailing, the tenant became consistently late on payments. An eviction process was initiated, but the tenant caught up. However, the issue resurfaced three months later, eventually leading to the tenant moving out. While there was some minor damage, the relatively easy resolution was a “blessing.”

This experience prompted a shift in their tenant screening process. Cedric now meticulously tracks tenant history and targets individuals with a higher minimum credit score requirement. This adjustment has proven effective, leading to more consistent rent payments and fewer issues.

Long-Term Vision to Scale

Cedric, who recently retired, has clear long-term goals for his real estate investments. His short-term objective is to reach five properties in the next few years. Beyond that, he aims for the business to become self-sustaining.

His strategy involves leveraging the equity from his existing properties as down payments for future acquisitions, aiming to grow his portfolio to at least 10 properties. This methodical expansion is designed to ensure continued cash flow and financial independence.

Key Advice for Aspiring and Growing Investors

Cedric offers four vital pieces of advice for those looking to get into or grow their real estate investment portfolio:

  1. Utilize a property management company: For handling day-to-day operations, rent collection, and eviction processes if needed.
  2. Timing is everything: Look to buy when the market is depressed, as he did during the onset of COVID-19 in 2020, which led to significant appreciation.
  3. Location, Location, Location: Focus on properties in good school districts (A-rated or 8/10+) and look for at least three-bedroom, two-bathroom layouts.
  4. Run the Numbers (Cash Flow is King!): Meticulously calculate all potential income against expenses (mortgage, insurance, HOA fees, property management) to ensure the property generates positive cash flow. He aims for at least a 20% gross profit margin to build cash reserves for repairs and maintain a healthy business bank account.

A Smooth Lending Experience: The LendingOne Difference

Cedric recounts a notably smooth experience with LendingOne, particularly compared to past interactions with other lenders. He found the process “smoother than I expected it to be,” highlighting the ease of online document submission and the efficient communication with his loan officer, Edrony, and underwriter, Pierre.

Cedric explained that working with LendingOne was straightforward: “I just went to the website, uploaded… talked with Edrony… supplied additional information… and everything worked out.” He praised the entire process from application to closing as “100% fantastic.” This positive feedback underscores LendingOne’s commitment to efficient and client-focused service.

Price reductions on home listings have returned to a level not seen in nearly three years, with 21% of U.S. active listings this summer seeing a cut—up more than five percentage points from July 2024.

For investors—particularly in the single-family rental space—this environment can mean stronger negotiating power and a greater chance to acquire properties at a discount.

That’s why LendingOne analyzed Realtor.com’s metro-level inventory data to find where price cuts are most common and where they’re rising fastest. 

Topline Findings

  • National price cut rate reached 21% in July 2025, matching the post-pandemic high from September 2022
  • Price cut activity is highest in Sun Belt metros, where home prices skyrocketed during the Pandemic Housing Boom
  • Price cuts are becoming more common in most of the largest U.S. metros, with 42 of 50 seeing more active listing prices cut than one year ago

Price reductions are back at post-pandemic highs

The rising share of homes with a price cut reinforces the shift toward a more buyer-friendly market that began after mortgage rates surged and the Pandemic Housing Boom ended. 

Share of U.S. Home Listings with Price Reductions

A single price cut doesn’t necessarily mean home values are dropping; some sellers simply overshoot the market or the true value of their property.

The real signal comes from the trend. So when the share of listings with cuts rises beyond normal seasonal patterns, it suggests the market is cooling and buyers have gained leverage.

Right now, that’s exactly what’s happening. Elevated mortgage rates and swelling inventory in certain metros are forcing more sellers to adjust their asking prices. 

Here’s the share of U.S. home listings seeing a price reduction, by July: 

July 2017 → 19.24%

July 2018 → 20.59%

July 2019 → 17.70%

July 2020 → 11.11%

July 2021 → 9.77%

July 2022 → 19.13%

July 2023 → 15.50%

July 2024 → 19.52%

July 2025 → 20.58%

The U.S. metros with the deepest price cut activity

Some markets are seeing price cut shares far above the national average—often those that experienced rapid pandemic-era price growth and are now adjusting to affordability limits.

Share of U.S. home listings with price reductions

Among the largest 100 U.S. metros, these are the 10 that saw the largest price reduced share of listings in July 2025:

  • Denver-Aurora-Centennial, CO → 32.9%
  • Colorado Springs, CO → 32.2%
  • Portland-Vancouver-Hillsboro, OR-WA → 31.3%
  • Austin-Round Rock-San Marcos, TX → 31.2%
  • Dallas-Fort Worth-Arlington, TX → 31.2%
  • Phoenix-Mesa-Chandler, AZ → 30.9%
  • Salt Lake City-Murray, UT → 29.7%
  • Indianapolis-Carmel-Greenwood, IN → 29.5%
  • Jacksonville, FL → 29.1%
  • Tampa-St. Petersburg-Clearwater, FL → 28.9%

In Mountain West metros like Denver and Colorado Springs, years of rapid price appreciation have left affordability stretched, and elevated mortgage rates are now forcing more sellers to drop prices. West Coast markets like Portland are dealing with slower in-migration and persistent affordability challenges, 

Meanwhile, Sun Belt metros, on top of dealing with the Pandemic Housing Boom price shocks, are facing intense competition from a surge in both new construction and resale listings.

For investors, these areas can offer higher negotiating leverage now—especially if rental demand remains strong despite softer sales activity.

Where price cuts are ramping up

While metros like Denver and Austin have among the largest shares of listings being cut, the Sun Belt isn’t catching a break. Many metros here are seeing the fastest gains in price cut activity as a flood of new supply collides with softer demand, forcing sellers to get aggressive. 

Mountain West markets are also posting some of the biggest jumps, even after starting with already-high price cut rates. Affordability pressures remain intense, and the seasonal bump in inventory is only adding to seller urgency—conditions that can open the door for well-timed acquisitions.

Even in the Midwest, markets like Columbus are seeing momentum build as inventory piles up after a strong post-pandemic run. For investors, that could mean more negotiating leverage and a wider selection of deals as head into the next year.

The share of home listings with price cuts is rising in 42 of the 50 largest metro areas

Big Picture

Price cuts are back at post-pandemic highs, led by Sun Belt and Mountain West metros where high rates and swelling inventory are forcing sellers’ hands. For investors, that could mean an opportunity to lock in a great deal on their next rental.