Investment Property

Investment Property Loans in Frisco & North Dallas

An investment property loan is a mortgage used to purchase or refinance a 1–4-unit property intended to generate rental income rather than serve as your primary residence. At First Lonestar Bank, we specialize in high-leverage financing for Texas investors, offering everything from long-term rental mortgages to specialized DSCR programs that allow you to qualify based on the property's cash flow rather than your personal tax returns.

How do I qualify for an investment loan in Texas?

Because rental properties carry more risk than a primary home, qualification standards are slightly higher. To secure the best rates in the DFW market, you generally need:

• Down Payment: Expect to put down 15% to 25%, depending on the loan type.
• Credit Score: A minimum of 660 is standard, though scores above 720 unlock the most competitive terms.
• Cash Reserves: Lenders typically require 6 months of PITI (Principal, Interest, Taxes, and Insurance) in reserve to ensure you can handle vacancies.

Strategic Financing for DFW Real Estate

In a fast-moving market like Frisco or McKinney, speed and flexibility are your greatest assets. We provide several paths to help you scale your portfolio:

• DSCR Loans (Debt Service Coverage Ratio): We focus on the "Bottom Line." If the property's rental income covers the mortgage payment, you can qualify without providing tax returns or pay stubs.
• Fix-and-Flip / Bridge Loans: Short-term financing for investors executing the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat) in Dallas neighborhoods.
• Bank Statement Programs: Ideal for self-employed investors who have the cash flow but don't show a traditionally high income on their tax filings.
• Portfolio Scaling: Unlike national lenders who cap you at 10 properties, we help professional investors finance much larger portfolios across the DFW metroplex.

The First Lonestar Difference

We don't just lend in North Dallas; we live here. Whether you are looking at a multi-family duplex in Carrollton or a high-end rental in Prosper, our team "bends over backwards" to offer local expertise that big-box banks can't match. We understand Texas-specific dynamics—from rising property taxes to the nuances of local rental demand—and we use that knowledge to get your deal to the finish line faster.

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Investment Property Frequently Asked Questions (FAQs)

What is the minimum DSCR ratio required?

At First Lonestar, we typically look for a ratio of 1.15 to 1.25, meaning the property generates 15-25% more income than its debt obligations. However, we have flexible programs for high-equity deals that may fall below these thresholds.

Can I use a 1031 Exchange with these loans?

Absolutely. We frequently work with investors using 1031 Exchange funds to defer capital gains taxes while upgrading their DFW real estate holdings.

Do investment loans require Private Mortgage Insurance (PMI)?

No. Because these loans require a minimum down payment of 15-20%, monthly PMI is not a factor, allowing for better immediate cash flow.

The Fine Print

This is not a commitment to lend; you must submit additional information for review and approval. Rates, Annual Percentage Rates (APRs), and terms are subject to change without notice. Certain restrictions apply to all programs. See your FLB Mortgage Loan Officer for complete program guidelines, loan application, applicable fees and annual percentage rates (APRs) for all loan programs. Full underwritten approval is required, and all loan approvals are subject to credit, income, and asset reviews and approvals. Bank NMLS#1215182