Looking to unlock more buying power on your next rental property acquisition? 🏘️ In today’s competitive market, preserving capital is just as important as finding the right deal. At TCW Capital Finance, we help real estate investors structure high-leverage DSCR loans that reduce out-of-pocket costs and accelerate portfolio growth—without sacrificing cash flow. 💰

By strategically using flexible underwriting guidelines and layered financing options, our clients are able to scale faster, compete more aggressively, and keep more liquidity available for future opportunities. 📈

Here are a few powerful options currently available:

📊 85% LTV financing for qualified borrowers (minimum 700 FICO)

🎁 100% gift funds allowed when the borrower can verify at least 5% of their own funds

🏦 90% total financing through 80% lender financing + 10% seller-held second lien

This high-leverage product is best suited for seasoned investors with strong credit profiles who are looking to amplify returns while keeping more capital in play. While the appeal of lower upfront investment is clear, it’s crucial to understand how leverage impacts DSCR (Debt Service Coverage Ratio) requirements—particularly for standard long-term rentals. Most single-family rentals based on market rent may struggle to meet DSCR thresholds at 85% LTV due to thinner margins and rising debt obligations.

However, the strategy becomes far more viable—and even advantageous—when applied to 2–4 unit properties or short-term rentals. These asset types often generate significantly stronger monthly income, which not only satisfies DSCR guidelines but also creates an opportunity for meaningful cash flow, even at higher leverage. Investors who understand how to underwrite based on net income projections (rather than defaulting to traditional rent comps) can unlock far greater scalability by preserving liquidity and redeploying capital across multiple high-performing assets.

Example: A well-qualified investor is acquiring a $525,000 triplex projected to generate $6,200/month in gross rental income. With 85% LTV financing, the lender provides $446,250, requiring just $78,750 down. Instead of tying up excess capital, the investor can allocate remaining funds to furnish each unit for mid- or short-term rental use—substantially increasing income potential while still meeting DSCR guidelines. This strategy not only improves ROI but creates optionality for future refinances or rapid portfolio expansion.

Gift funds—non-repayable contributions from a family member or close relation—can be used to cover all or part of the down payment. These funds must be properly documented with a signed gift letter and verified donor bank statements. At closing, they’re typically wired directly to escrow or included in the total funds to close alongside any borrower contribution.

This feature can be especially powerful for newer investors, or even experienced ones looking to preserve capital while acquiring cash-flowing assets. Instead of delaying acquisition to save up a full down payment, borrowers can move quickly by leveraging support from their network—without compromising loan structure when planned correctly.

Here’s how the options break down:

✅ If the borrower verifies at least 5% of the purchase price in their own funds, the remaining balance can be gifted with no reduction to the maximum qualifying LTV (e.g., still eligible for 85%).

⚠️ If the borrower has no personal funds to contribute, 100% of the down payment can still be gifted, but the maximum LTV will be reduced by 10% (e.g., from 85% to 75%).

Example: A borrower with a 720 FICO is purchasing a $300,000 duplex bringing in $3,600/month. They have $15,000 of their own funds (5%) and receive $30,000 as a gift from a relative. Because they’ve contributed the minimum required from their own account, they retain access to full 85% LTV financing—giving them maximum leverage without delaying their investment timeline.

For investors who want maximum leverage with minimal cash out-of-pocket, this structure allows you to finance up to 90% of the purchase price by combining our first mortgage with a seller-held second mortgage or “carry back.” While this strategy typically comes with a slightly higher interest rate due to the increased risk profile, the ability to preserve capital and control more real estate often far outweighs the cost—especially when the property produces strong cash flow or offers value-add upside.

At TCW Capital Finance, we support Combined Loan-to-Value (CLTV) up to 90% across a wide range of investment property types, including:

🏘️ 1–4 Unit Residential

🏢 Mixed-Use

🏬 Multi-Family (5+ Units)

🏗️ Warehouse & Industrial

🚘 Automotive Properties

🛒 Retail Spaces

By allowing a seller to hold a second lien in the amount of 10%, the investor only needs to bring in the remaining 10% as a down payment—freeing up working capital for renovations, reserves, or scaling into additional assets.

Strategic Insight: Seller carrybacks are especially effective in today’s market where some sellers are motivated to close quickly, maintain income via interest payments on their second, or reduce capital gains exposure. Additionally, this structure can be a win-win when dealing with distressed or value-add properties, as it gives the investor flexibility while helping the seller preserve pricing.

Example: An investor is purchasing a $600,000 retail property. TCW Capital Finance provides 80% financing ($480,000), the seller agrees to carry back 10% ($60,000) in second position, and the investor only brings $60,000 (10%) to closing. Rather than tying up $150,000+ for a traditional 75% LTV deal, the investor retains nearly $90,000 in liquidity—allowing them to fund tenant improvements, reposition the property, or jump on their next opportunity.

Our standard DSCR rental loan program is designed with real investor needs in mind:

✅ Loan amounts from $75,000 up to $10 million per property

✅ Up to 85% LTV on purchases and rate/term refinances; up to 75% LTV for cash-out

✅ No personal income requirements and no seasoning in most refi scenarios

✅ Fixed rate, ARM, interest-only, balloon, and non-recourse structures available

✅ Rates starting at 5.875%, with interest rate buy-downs and flexible prepay options

✅ Eligible properties include 1–4 unit residential, 5+ unit multifamily, mixed-use, light industrial, retail, office, self-storage, NNN lease, churches, and more

✅ Available to U.S. Citizens, Permanent & Non-Permanent Resident Aliens, and Foreign Nationals

✅ Must use a registered business entity in good standing (no personal loans)

✅ Available in 49 states; properties up to 20 acres, rural OK with sales comps

✅ Minimum credit score of 640 (scores below may qualify with 35–50% down)

✅ Reserve requirements: 0–6 months PITIA (loans ≤ $1M), 3–9 months PITIA (loans > $1M)

If you’re ready to move forward or want to explore which structure best fits your next acquisition, reply to this email or click below to schedule a quick call. Let’s build your portfolio with smarter financing and stronger leverage.

📞 Let’s discuss your next deal! Schedule a Consultation to get started.