A Rental Hold Loan is a short-term financing option designed for real estate investors acquiring or refinancing rental properties. It allows investors to purchase, stabilize, and prepare a property for long-term financing while making interest-only payments.

Rental Hold loans are designed for real estate investors, including individuals, LLCs, and corporations, who own or plan to acquire income-generating rental properties. Borrowers typically need a credit score of 660 or higher and must meet DSCR requirements.

Most lenders accept the following property types:
🏡 Single-Family Rentals (SFR)
🏢 Multifamily (2+ units, apartment buildings)
🏬 Mixed-Use Properties
🏠 Short-Term Rentals (Airbnb, VRBO, vacation homes)
🏭 Commercial Real Estate (office, retail, industrial, etc.)

Interest rates for rental hold can vary widely based on market conditions, the borrower’s creditworthiness, and the property’s appraisal value. However, they are usually higher than traditional long-term financing options (typically 8%-12%)

The required credit score is 650 min.
While most lenders continue to examine your credit report during the loan application process, this review is not the primary determinant for loan approval. Instead, assessing your credit score serves as a way to assess your eligibility for refinancing into a traditional commercial loan, which can be a strategic exit strategy

Yes, if you're purchasing a property lenders require a down payment. The amount varies by lender and can range from 20-30% of the property’s purchase price.

Loan amounts typically range from $75,000 to $5 million, depending on the property’s value, rental income, and borrower qualifications.

Yes, our rental hold loans comes with various fees, including origination fees, and closing costs, so it’s essential to review the terms before proceeding.

Some lenders charge prepayment penalties or exit fees, while others allow early payoff. Always check the loan terms before signing.

The lender provides short-term capital (typically 12-36 months) based on the property’s value and potential cash flow.
- Investors use the funds to acquire, renovate, or refinance a rental property.
- The borrower makes interest-only payments during the loan term.
- Before the term ends, the borrower must refinance, sell, or pay off the loan.

Yes, many lenders allow short-term rental (STR) properties, but they may require:
✔ Proof of occupancy rates and revenue projections.
✔ Compliance with local short-term rental regulations.

No, most rental hold loans do not require tax returns or W-2s. Instead, lenders focus on:
✔ The property’s cash flow and potential rental income.
✔ The borrower’s creditworthiness and reserves.

⏳ Loan Approval: 7-14 days (depends on underwriting & appraisal).
💰 Funding: 10-21 days (faster for experienced investors).
🏡 Closing Time: Can be expedited for competitive real estate deals.

Yes, many lenders allow cash-out refinancing with a Rental Hold Loan, but it depends on the lender’s terms, your property’s value, and your investment strategy.

A cash-out refinance allows you to replace your existing rental hold loan with a new loan for a higher amount, taking the difference in cash. This strategy helps investors extract equity to reinvest in new properties or cover other expenses.
Example:
Current Property Value: $500,000
Existing Loan Balance: $300,000
New Loan Amount (75% LTV): $375,000
Cash-Out Amount: $75,000 ($375,000 - $300,000)

Yes, many lenders offer portfolio loans, allowing investors to finance multiple rental properties under one loan.

Lenders typically require:
✅ Seasoning Period: Some lenders require 3-12 months of ownership before refinancing.
✅ Loan-to-Value (LTV): Usually capped at 70-75% of property value.
✅ Rental Income: The property should generate sufficient rental income to qualify for refinancing.
✅ Credit Score: 650 (better terms with 680+).
✅ DSCR (Debt Service Coverage Ratio): Some lenders require a DSCR of 1.1+, while others don’t.

Pros & Cons of Cash-Out Refinancing with a Rental Hold Loan
Pros:
✔ Unlocks equity for reinvestment.
✔ Converts short-term financing into long-term stability.
✔ Can help scale a real estate portfolio.
✔ Potentially lowers monthly payments with long-term financing.
Cons:
❌ May have higher interest rates than a standard refinance.
❌ LTV limits may restrict the cash-out amount.
❌ Some lenders require seasoning periods before cash-out eligibility.

Best Exit Strategy After a Cash-Out Refinance
Convert to a DSCR loan (30-year term based on rental income).
Refinance with a traditional mortgage if eligible.
Reinvest the cash-out funds into additional rental properties.

Best Exit Strategy After a Cash-Out Refinance:
Convert to a DSCR loan (30-year term based on rental income).
Refinance with a traditional mortgage if eligible.
Reinvest the cash-out funds into additional rental properties.

Yes! Rental hold loans are short-term and require a solid exit plan, such as:
✔ Refinancing into a long-term DSCR or conventional loan.
✔ Selling the property at a profit.
✔ Cash-out refinancing to repay the loan.

If you can’t refinance or sell before the loan term ends, your options may include:
1️⃣ Requesting a loan extension (if the lender allows it).
2️⃣ Refinancing with another short-term lender.
3️⃣ Selling the property to avoid default.