How to Finance an Investment Property in PA & NJ

Investing in Real Estate

Real estate investing can build serious wealth — but financing investment properties works differently than buying a primary residence.

Key Differences for Investment Properties

Higher Down Payments

Primary residence: 3-5% down

Investment property: 15-25% down (typically 20-25%)

Higher Interest Rates

Expect rates 0.5-0.75% higher than primary residence rates. Lenders view investment properties as higher risk.

Stricter Qualification

Higher credit score requirements (usually 680+)

More cash reserves required (6 months of payments)

Lower DTI ratio limits

Loan Options for Investors

Conventional Investment Loans

The most common option. Up to 10 financed properties with Fannie Mae guidelines.

DSCR Loans (Debt Service Coverage Ratio)

Qualify based on the property's rental income rather than your personal income. Great for experienced investors.

Portfolio Loans

Held by the lender (not sold to Fannie/Freddie), allowing more flexible underwriting.

Hard Money / Bridge Loans

Short-term financing for fix-and-flip projects. Higher rates but faster closing.

Strategies to Maximize Returns

House Hacking

Buy a 2-4 unit property, live in one unit, rent the others. Qualify with owner-occupied rates and low down payment (FHA allows 3.5% on multi-unit).

BRRRR Method

Buy, Rehab, Rent, Refinance, Repeat. Use short-term financing to acquire and renovate, then refinance into a long-term loan.

Tax Advantages

Investment properties offer significant tax benefits:

Mortgage interest deduction

Depreciation (27.5 years for residential)

Property tax deduction

Operating expense deductions

1031 exchange to defer capital gains

We Work with Investors

The Taberne Group understands the investor mindset. We'll help you structure financing that maximizes your returns and builds your portfolio.