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DSCR Loans in Marion County, Florida: No-Doc Way To Build Your Real Estate Portfolio Quickly

If you're starting out investing in real estate, it can be challenging to get a loan. Most mortgage companies require a lot of paperwork before they'll give you the money to buy your first property. Debt Service Coverage Ratio (DSCR) loans in Marion County, Florida, might be the perfect financing tool to quickly build your real estate portfolio without using out-of-pocket cash to purchase an investment property.

You're probably wondering how these loans work and why they might be right for you. This article will discuss the DSCR loan basics, reasons to get it, how it works, calculating your DSCR, the DSCR payment, income limits, and the minimum DSCR in Marion County, Florida.

We'll also show you the five best cities in Marion County, Florida to invest in real estate. Read on to learn more.

The Basics of DSCR Loans?

A debt service coverage ratio (DSCR) loan is a type of financing that allows you to purchase investment properties and repay the loan using the investment income. These loans are a great way to build your real estate portfolio quickly and easily.

The idea behind DSCR loans is to use cash flow from rental properties to repay the interest and principal on your loan. Because of this, you do not have to meet any financial qualifications because your rental income will cover your mortgage and loan interest payments.

While DSCR loans aren't new to real estate investing, they're becoming more popular with investors looking for quick cash flow. However, these loans aren't for everyone since they come with some lenient requirements, like at least a 15% down payment on the property you're purchasing, an excellent credit score, and a cash reserve. DSCR loans may be outstanding if you meet all the basic eligibility requirements.

Reasons to Get a DSCR Loan in Marion County, Florida

If you're looking to buy real estate in Marion County, Florida, and need help securing financing to pay for it, consider applying for a DSCR loan. This loan requires reasonable eligibility requirements than traditional loans, meaning you can invest in more property in less time and get your investing career off the ground much more quickly and easily.

The guide below will help you understand why DSCR loans make sense for your real estate investment in Marion County, Florida.

DSCR loans are outstanding for people who cannot qualify for traditional loans because they typically require a minor difference between income and debt than the latter types of mortgages. If you are interested in purchasing a house and don't think you can get a mortgage because your income and debt are low, talk with your lender about a DSCR mortgage.

A DSCR loan is an excellent financing option if you're an investor looking for a flexible financing option. This loan is available for various types of investment property, including single-family homes, townhouses, condos, and more, depending on your lender.

When investing in Marion County real estate, you have many options available. You can buy land and build your property, allowing you to customize the design and layout to suit your needs. You can also purchase an existing building or structure, renovate it and rent it out or sell it at a profit. There are several other ways of investing in real estate, and if you're starting, DSCR may be your best option.

A thriving real estate market has led to an influx of new residents in Marion County, creating an excellent opportunity to build wealth and improve your realty portfolio. More people moving into the area means more people renting your investment property.

The growing population creates business for realtors, which can be suitable for landlords. Higher rental and lower vacancy rates in Marion County mean you won't spend much time searching for tenants.

The following are some of the reasons new residents are moving to Marion County, Florida, creating new real estate investment opportunities that make DSCR loans valuable for investors:

  • It's a business-friendly county.

  • Great outdoor recreational experiences.

  • Affordable cost of living.

  • No social security taxes.

  • Excellent education system.

  • Great healthcare services.

  • More job opportunities for job seekers.

  • Lower unemployment rates.

  • Availability of modern conveniences.

  • A welcoming community.

How DSCR Loan Work

In the ever-growing real estate investment industry, it's generally accepted that debt service coverage ratio (DSCR) loans are the most reliable type of mortgage loan available to real estate investors. The guide below will discuss how DSCR loans work to help you achieve real estate investment objectives and build your portfolio.

Unlike banks, DSCR loans consider your investment income instead of your gross income. This may be an excellent way to build your real estate portfolio since you don't need to prove your monthly gross income before getting approved for a DSCR loan.

Even if you do not earn much money or own assets, you can secure a DSCR loan if your investment property promises to generate enough income to cover the loan repayments.

DSCR loans are created particularly for real estate investors, including individuals and businesses, looking to invest in or rent out properties for income. The DSCR loans allow you to use rental income to cover debt service without including your salary on the loan application.

DSCR Loans Eligibility Requirements in Marion County, Florida

While a DSCR loan is a simple no-doc way to finance an investment property and build a successful real estate portfolio, there are specific requirements you must meet.

These requirements help determine if you're eligible for a DSCR loan and how much you can borrow based on income, debts, and other factors. The following eligibility requirements are reviewed to determine eligibility for a loan.

  • Loan type (5-year and interest-only ARMs, 30-year fixed rates, etc.)

  • Loan-to-value (LTV) ratio of 75% to 80%

  • Closing under the name of an LLC

  • The number of properties you own

  • The property's future rental income

  • Income and employment history

  • A credit score of 640 or higher

  • Debt-to-income (DTI) ratio

  • Seller-paid closing costs

  • Prepayment penalties

  • Maximum loan amount

  • The loan purposes

  • Cash reserves

  • Property use

  • Property type

  • Cash reserves

Note that there are exceptions to these rules, and it's recommended that you contact your lender before applying to determine their requirements.

A person hand hold a coin and wooden model house with key

How to Calculate DSCR

An individual's DSCR is calculated by determining the total income and full mortgage payment, including the principal, interest, taxes, insurance (PITI), HOA fees, and any extra fees. DSCR is typically expressed in a decimal (1.25x or 1.25).

Having a DSCR of 1.25x means your property has 25% more yearly income than the mortgage payment. Rates higher than 1.0 usually indicate good prospects, while rates lower than 1.0 indicate poor potential.

The computation formula is DSCR = income/payments. For example, if you're an owner of a residential building generating a revenue of $2,500 and your monthly payments are $2,250, your DSCR is 1.11. You can improve your DSCR by raising or reducing rents or expenses.

How to Determine DSCR Income

You will generally use your monthly rental income when determining a residential property's DSCR income, while commercial property's DSCR income is typically determined using your property's Net Operating Income (NOI).

NOI expresses the property management, taxes, maintenance, and other operational expenses deducted from your property income.

How to Determine DSCR Payment

Your DSCR payment consists of principal, interest, taxes, insurance (PITIA), and HOA fees. It's essential to discuss the exact amount with your DSCR lender to determine the interest rate and actual payments associated with your DSCR loan. Your lender will factor in your total debt, debt-to-income ratio, personal credit score, and DSCR income before giving you a repayment plan.

It's worth noting that your monthly rent and housing expenses affect your DSCR payment. The greater your income and the lower your expenditures, the better your DSCR and the more potential for long-term success. You could use several options, for example, increasing the rent or making a sizable down payment for your property.

The Minimum DSCR in Lake County, Florida

Lenders in Marion County might have different eligibility criteria, but the minimum DSCR for financing a property is typically 1.25x. While many lenders approve loans with lower DSCRs, some don't.

If you're looking to secure a DSCR loan, contact a DSCR lender in your region in Marion for their viewpoint on your minimum DSCR qualification based on your property type, potential DSCR income, and payments.

The 5 Best Cities to Invest in Marion County, Florida

If you want to make money in real estate, it's essential to know which cities in Marion County, Florida, are the best and how to choose them wisely. Investing in the right place can help you reap the benefits of each location's unique strengths and opportunities while avoiding its potential drawbacks and challenges.

The following guide of the top five cities for real estate investing in Marion County, Florida, will help you determine the best city suited to your real estate investment needs and lifestyle.


Ocala, also known as Brick City, is a city located in North-central Florida. As of 2020, it has an estimated population of 60,021. It's the county seat and largest incorporated municipality of Marion County.

Between being a growing city and having a low cost of living, Ocala is one of our top cities for real estate investing in Marion County. The home value in Ocala is currently at $275,311, which has increased by 35.9% over the past year.

With the city's population growth, there's no shortage of potential clients looking to buy or sell homes. The diverse community, recreation centers, shopping areas, great schools, excellent health system, and an overall affordable cost of living give this city plenty of room for growth, making it an attractive opportunity for investors.


Dunnellon is a quiet little city with a current population of just over 2,300 people. While it might not be for everyone, it's well-suited for people who prefer to live far away from busy cities but want easy access to other amenities. Dunnellon's typical home value is $287,365, which has increased by 29.9% since last year.

Real estate prices have been on an upward trend and show no signs of slowing down. If you want to invest in a small city with all the necessary amenities, investing in Dunnellon may be your best bet.

The low cost of living, excellent school system, affordable healthcare services, typical Florida tax breaks, fantastic recreation opportunities, and retirement friendliness are some of the main things that draw new residents here. This means you'll always get new clients for your realty business.


A booming economy and an increasing population have made Belleview one of Florida's best-kept secrets for real estate investors. Due to its proximity to both Orlando and Ocala—two cities with quickly growing populations—Belleview is likely one of the most promising real estate markets in Marion County. The home value in Belleview currently stands at $245,262, where values have gone up 35.1% since the year.

Belleview's population has increased rapidly due to its proximity to Orlando and Ocala, which are also multiplying. As these two cities continue their growth spurts, real estate investors can expect Belleview's population and its real estate market to grow with them.

The great community, shopping options, great school district, excellent healthcare, and affordable cost of living are the crucial things drawing new settlers to Belleview, which is suitable for your investment goals.


While Reddick isn't necessarily a city (it's much more of a small town), we're going to count it as one of the best investment cities. Most people love Reddick for its proximity to recreational facilities, including country clubs with golfing establishments. It also has easy access to Orlando and Tampa, making commuting easier for those who work outside their home county.

Many properties are available at affordable prices, making it an ideal location for investors looking to get their feet wet before making a substantial purchase. Home prices in Reddick have dropped by 15.2% since last year, selling for a median price of $140K.

Silver Springs Shores

Investing in Silver Springs Shores is one of the best ways to build some real estate funds. This small community offers great lakefront properties ideal for residents who want to enjoy nature while accessing modern conveniences. The median home price in Silver Springs Shores is current at $195,000, increasing by 23.5% since the last year.

Located next to Silver Springs State Park and less than half an hour from Ocala National Forest, you're likely to find plenty of beautiful views no matter where you live. Plus, several public beaches are located just 10 minutes away. With so much natural beauty and friendly people, it's no wonder more people want to move into Silver Springs Shores yearly, creating more opportunities for investors.

Bottom Line

Now is an excellent time to pull the trigger if you've ever considered buying real estate. The market is ripe with opportunity, which makes this an ideal time to start building your portfolio of property assets in Marion County, Florida.

DSCR loans are an effective and no-doc way to develop your real estate portfolio quickly. Contact your local lender to help determine if you're eligible for a DSCR loan and get started on your investment journey in Marion County.

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

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