Portfolio Loan Playbook: Flexible Financing to Scale Your Real Estate Portfolio

When I help clients who’ve tapped out conventional financing or need flexibility, portfolio loans are often the next move.

Smaller banks and credit unions keep these loans on their books, so they write their own rules and can move faster.

Credit score minimums float, but 620 is a common floor.

Most banks underwrite to DSCR first, then look at global cash flow and your personal financial statements.

For DSCR, most lenders want 1.20–1.30+ with realistic vacancy, management, and reserves.

I model DSCR at acquisition and at future refinance using rate-shock scenarios so you don’t get trapped at balloon.

Portfolio lenders commonly finance non-owner-occupied rentals without requiring you to live there.

That’s why they’re ideal for investors buying directly in an entity.

Twenty percent down is typical for 1–4 units if the deal’s strong.

Expect 25% down on 2–4 units if DSCR is tight or the property is quirky.

Standard max LTV is often 80%, but lenders may cap at 70–75% for lower credit, odd property types, or weak DSCR.

For SDIRA non‑recourse loans, plan on 35%+ down and a strict DSCR screen because the bank can only take the property.

Most portfolio loans are ARMs with a 3/5/7-year fixed period, then annual adjustments tied to an index plus a margin.

Thirty-year fixed is rare; 15–20-year fixed exists but means higher payments.

A 30-year amortization is common even if the note balloons at year 5, 7, or 10.

I calendar balloon dates on day one and start refinance prep 9–12 months early.

Because you’re usually at 80% LTV or lower, PMI rarely applies.

There are no hard agency loan limits; the bank sizes your loan to collateral, DSCR, global cash flow, and its legal lending limits.

Unlike conventional lending, there’s no strict cap on number of loans.

In practice, banks manage concentration risk, so your relationship, liquidity, and documentation determine how far you go.

You negotiate concessions with the seller, but the lender caps what counts toward closing costs.

Plan on 3–6% allowed, depending on the bank and property type.

Many portfolio lenders will look 2–4 years back for BK or foreclosure, and some bend faster with compensating factors and a strong DSCR.

When clients are rebuilding, I show a clean, documented recovery story with reserves and stable income.

Rate/term refinances are common, and many banks allow cash‑out to 75–80% LTV if DSCR holds.

Some will recast after a lump‑sum principal payment; ask early because it’s lender-specific.

I always estimate prepayment penalties and closing costs, then update True Net Equity™ after refinancing to avoid phantom gains.

Cash‑out often lowers cash flow; we offset with rent optimization or reserves.

Expect financing for 1–4 unit rentals, small multifamily, mixed-use, and some commercial.

Unique properties work if DSCR and exit make sense.

Most portfolio loans allow you to buy in an LLC, but expect a personal guarantee.

Non‑recourse is rare outside SDIRA loans and almost always demands lower LTV and higher rates.

If a bank offers cross‑collateralization, I model worst‑case contagion risk across properties and only accept if it unlocks outsized value.

Underwriting can be as fast as 24–48 hours when the file is clean.

I include trailing 12-months income/expenses, leases, tax returns, personal financial statement, global cash flow, rent roll, and reserves.

ARMs can reset higher and compress cash flow.

Balloons force a refinance decision that may land in a bad rate market.

I run +300 bps rate shocks, 10% rent dips, and 8% vacancy to see if DSCR stays above 1.20.

If not, we map principal paydown or a planned sale six months before balloon.

I stack the Return Quadrants™ for each property so you see the whole return profile, not just cash flow.

Then I track True Net Equity™ to decide when a refinance or sale actually increases your net position after costs.

When appropriate, I combine Nomad™ for early acquisitions with portfolio loans for scale once owner‑occupant options are exhausted.

That keeps financing flexible while you graduate to bank relationships and larger assets.