What Financing Options Are Best for First-Time Real Estate Investors?
Hey friends— If you're thinking about buying your first rental property, one of the biggest questions on your mind is probably: “How do I finance this?” You’re not alone. Financing is one of the most important decisions you’ll make as a new investor, and the good news is… you have options.
Let’s break them down in a simple, no-pressure way so you can choose the path that fits you and your goals.
Conventional Loans: The Classic Route
For many first-time investors, a conventional loan is the most straightforward choice.
Here’s what to expect:
Down payment: 15–25%
Best for: Long-term rentals, investors with strong credit, and those wanting predictable lending
Pros: Competitive rates, familiar process, widely accepted
Cons: Higher down payment, stricter income requirements
If you’re in a strong financial position already, this can be a great starting point.
FHA & VA Loans: Perfect for House Hacking
If you’re willing to live in the property, these options are worth exploring.
FHA Loan
Down payment: As low as 3.5%
Must live in the property for 12 months
Ideal for house hacking—live in one unit, rent the others.
VA Loan
$0 down (for eligible veterans)
Also great for house hacking and building equity quickly.
These loans can dramatically lower the barrier to entry if you’re just getting started.
DSCR Loans: Qualify Based on the Property, Not Just You
I love DSCR loans for investors because they’re based on the property’s income, not your personal W-2.
If the rental income covers the mortgage payment, you may qualify—even if your debt-to-income ratio is tight.
If you want a deeper dive into DSCR loans, check out my earlier episode with Patrick Penner (Episode 18). It’s packed with helpful examples.
Creative Financing: For the Investor Who Wants Options
You don’t need a huge savings account to start if you’re open to thinking creatively.
A few approaches:
Partnerships (you bring the hustle, they bring the capital)
Private lenders who believe in your deal
Seller financing when the seller becomes the bank
These strategies aren’t for every deal, but they’re powerful tools to have in your toolbox.
The Bottom Line
There’s no “one right loan” for every new investor—just the right loan for you, your lifestyle, and your long-term goals.
When you understand your financing options, you gain clarity, confidence, and the ability to move forward at the right time.
If you want a deeper breakdown, be sure to listen to this week’s podcast episode.
👉 Listen here: What Financing Options Are Best for First-Time Real Estate Investors?
Go and grow,
Jonna
