Financing a $1M to $5M Residential Investment Property: Your Loan Options Compared

For a $1M to $5M residential investment property, you have five core loan options, and the right one depends entirely on your plan: a DSCR loan for buy-and-hold, a bridge loan for speed or transition, a fix-and-flip loan for resale value-add, a renovation loan for improving a hold, and a construction loan for ground-up. Each carries different terms, leverage, and closing speed. This guide compares them head to head so you can match the financing to the strategy.

The $1M to $5M residential band is its own world: larger than what retail banks comfortably handle, smaller than institutional CRE, and served best by a brokerage with access to institutional and private capital. Foreign national investors qualify for every one of these options on the same terms as US borrowers, a point we return to at the end. Let's compare the five.

DSCR Loans: The Buy-and-Hold Default

A DSCR loan qualifies on the property's rental cash flow rather than your personal income, making it the default for any property you intend to rent and hold. For our residential core, DSCR is 30-year fixed around 6% to 6.5%, sized at $1M to $3M (up to $5M by exception), with up to 80% LTV on purchase and 75% LTV on a cash-out refinance. The coverage ratio can go as low as 1.0x.

• Use it when: you are holding for income and appreciation.
• Speed: close in about two weeks from a clean file.
• Strength: predictable long-term payment, qualifies on rent.

Full detail on the DSCR loan page.

Bridge Loans: Speed and Transition

A bridge loan is short-term capital for when timing matters more than long-term rate: winning a competitive purchase, buying before a sale closes, or holding while you stabilize or reposition an asset. Leverage runs up to 75% to 80% LTV. The exit is usually a refinance into a DSCR loan or a sale.

• Use it when: you need to move fast or transition between situations.
• Speed: the fastest option, designed for quick closes.
• Strength: certainty and speed; you refinance to permanent terms later.

See the bridge loan page and our deeper bridge loan guide.

Fix-and-Flip Loans: Renovate and Resell

A fix-and-flip loan finances both the purchase and the renovation of a property you plan to improve and resell. It is sized on cost, up to 85% to 90% LTC (loan to cost), so a large share of both the acquisition and the rehab budget is financed, keeping your capital outlay low and your return on equity high.

• Use it when: you are buying to renovate and sell for profit.
• Speed: fast, structured around the project timeline.
• Strength: high leverage on cost, funds the rehab.

Detail on the fix-and-flip page.

Renovation Loans: Improve a Hold

A renovation loan is for the investor who wants to upgrade a property they intend to keep, not flip. It funds meaningful improvements that lift rent and value, after which you typically refinance into long-term DSCR financing on the higher stabilized value. It is the bridge between a value-add purchase and a permanent hold.

• Use it when: you are improving a property you will hold and rent.
• Speed: moves on the project schedule.
• Strength: finances upside you then lock in with a DSCR refinance.

See the renovation loan page.

Construction Loans: Ground-Up

A construction loan funds ground-up development, disbursed in draws as the project hits milestones. It is the most involved product, with the most underwriting around budgets, plans, and the builder, but it is the right tool when you are building rather than buying. The exit is a sale or a refinance into permanent financing once complete.

• Use it when: you are developing from the ground up.
• Speed: longest to underwrite; draws follow construction.
• Strength: finances the full build with milestone draws.

Detail on the construction loan page.

Side-by-Side: Which One Fits

A quick way to choose:

• Holding to rent? DSCR.
• Need to close fast or transition? Bridge.
• Renovating to resell? Fix-and-flip.
• Improving a property you will keep? Renovation, then refinance to DSCR.
• Building from scratch? Construction.

Many investors use more than one across a property's life: bridge to acquire, renovation to improve, then DSCR to hold. To estimate leverage and payments before you choose, use our loan calculator.

Foreign National Investors: Same Options, Same Terms

Every option above is available to non-US investors on identical terms. A foreign national holds the property in a US LLC, qualifies on the asset rather than a US credit score or US income, and receives the same rate and leverage a domestic borrower would. There is no foreigner premium and no degraded LTV. The full path is in our guide to foreign national loans for US investment property.

Get Matched to the Right Loan

With five products across the $1M to $5M residential band, the value of a brokerage is getting matched to the right one and the right capital partner quickly. We issue a term sheet in 24 to 48 hours and can close in about two weeks. When you know your plan, submit your deal and we will recommend the financing that fits.