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How an Investor Bought 3 Rental Properties Using DSCR Loans in Colorado (2025)
Real estate investors are always looking for ways to scale faster without getting stuck in traditional income verification. One of the most effective tools in 2025 is the DSCR (Debt Service Coverage Ratio) loan.
In this case study, we'll break down how an investor used DSCR financing to acquire three rental properties in Colorado—without relying on tax returns or W2 income.
Investor Profile
- Self-employed real estate investor
- Owns 1 existing rental property
- Strong credit (around 700+)
- Looking to scale to multiple properties quickly
The Challenge
The investor was self-employed and did not show enough income on tax returns to qualify for traditional financing, limiting their ability to get approved through conventional lenders.
Why the Investor Chose DSCR Loans
Instead of qualifying based on personal income, DSCR loans focus on:
- Rental income from the property
- Cash flow vs total housing payment (including taxes and insurance)
This allowed the investor to avoid income documentation, qualify based on deal performance, and scale faster.
Property #1: Long-Term Rental in Colorado Springs
- Purchase Price: $375,000
- Down Payment: 20% ($75,000)
- Loan Amount: $300,000
- Rental Income: $2,600/month
- Total Monthly Payment (PITI): ~$2,350/month
- DSCR: ~1.11
Approved based on property cash flow. Tighter DSCR but still qualified — stable long-term rental demand supported the deal.
Property #2: Cash-Flow Rental in Montrose
- Purchase Price: $285,000
- Down Payment: 25% ($71,250)
- Loan Amount: $213,750
- Rental Income: $2,200/month
- Total Monthly Payment (PITI): ~$1,750/month
- DSCR: ~1.26
Stronger DSCR improved loan terms, with higher monthly cash flow and a lower purchase price that made scaling easier.
Property #3: Short-Term Rental Near Telluride
- Purchase Price: $520,000
- Down Payment: 25% ($130,000)
- Loan Amount: $390,000
- Projected Rental Income: $4,200/month
- Total Monthly Payment (PITI): ~$3,450/month
- DSCR: ~1.22 (based on rental projections)
Approved using projected short-term rental income — higher income potential and positioned for both cash flow and appreciation.
Total Portfolio Breakdown
- Total purchase volume: ~$1.18M
- Total cash invested: ~$276K
- Combined monthly rental income: ~$9,000
- Combined monthly payments (PITI): ~$7,550
- Portfolio DSCR: ~1.19
Key Advantages of Using DSCR Loans
Scale Despite Income Limitations. Traditional lenders restricted them due to tax return income, but DSCR loans removed that barrier.
Acquire Multiple Properties Quickly. No cap tied to personal income allowed faster portfolio growth.
Focus on Property Performance. Each deal was evaluated based on cash flow—not personal finances.
What Made These Deals Work
- Strong rental markets across Colorado
- DSCR ratios at or above ~1.1
- Strategic 20–25% down payments
- Mix of long-term and short-term rentals
Final Thoughts
This case study shows how DSCR loans in 2025 can be a powerful tool for investors—especially those who are self-employed or limited by traditional income documentation. By focusing on property cash flow instead of personal income, investors can unlock opportunities to scale that would otherwise be unavailable.
Want to dig deeper? Read our guides on DSCR loan rates in 2025 and DSCR down payment requirements.