What is a DSCR loan for real estate rentals?

A DSCR (Debt Service Coverage Ratio) loan evaluates a rental property based on its cash flow rather than personal employment income. Lenders verify that monthly rental income exceeds the mortgage payment by a target ratio, usually 1.20 or higher.

How does a 1031 exchange work when selling rental property

A 1031 exchange allows real estate investors to defer capital gains taxes when selling an investment property by rolling all sale proceeds into a replacement property of equal or greater value within strict timelines.

What is Cap Rate in real estate investing?

Capitalization Rate (cap rate) measures a property's annual rate of return. It is calculated by dividing net operating income by the purchase price or current market value of the property.

How is cash-on-cash return calculated for rental properties?

Cash-on-cash return measures annual pre-tax cash flow divided by the total cash invested (down payment, closing costs, and initial rehab). It shows your actual annual cash yield earned on out-of-pocket funds.

What are the potential challenges or risks of a cost segregation study?

While cost segregation accelerates depreciation to reduce early-year income taxes, potential challenges include future depreciation recapture taxes upon sale, engineering study costs for smaller assets, and passive loss restrictions if you do not qualify as a real estate professional under IRS rules.

Investment Calculators

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Hard Money to DSCR Refinance Guide

by Curtis Waters | Feb 13, 2026 | Investment Calculators

For the modern real estate entrepreneur, speed is everything. Hard money allows you to move fast on distressed assets, but the high interest rates and short terms make an exit strategy essential. The most effective path to long-term wealth is the transition from Hard...

DSCR Calculator

by Curtis Waters | Apr 3, 2024 | Investment Calculators

Author: Curtis Waters, MBA — Licensed Real Estate Broker-in-Charge (NC & SC) | 12 Years of Real Estate Investing Experience Published: April 2024 | Last Updated: March 19, 2026 | Category: Investment Calculators & Commercial Debt <img...

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