DSCR Loans for Doctors: Real Estate Investing for Physicians

You spent a decade in training. You earn well — often very well. And yet getting approved for an investment property loan can feel like another residency application: mountains of paperwork, long waits, and results that don't reflect your actual financial strength.

Physicians face a unique set of lending frustrations. Massive student loan balances inflate your DTI. Complex compensation structures (base + RVU bonuses + partnership distributions + call pay) make income verification a nightmare. And if you're transitioning from residency to attending, your two-year income history might show a fellow's salary rather than your current earnings.

DSCR loans cut through all of this. No income verification. No DTI calculation. No explanation of your compensation model. The property qualifies itself, and your medical degree is irrelevant to the underwriter.

Here's how physicians are using DSCR loans to build real estate portfolios alongside their medical careers.

Why Conventional Loans Frustrate Physicians

The Student Debt Problem

The average medical school graduate carries $200,000-$250,000 in student loan debt. Even on income-driven repayment plans with $0 monthly payments, conventional lenders often calculate a hypothetical payment of 0.5-1% of the loan balance for DTI purposes.

That means your $250,000 in student loans adds $1,250-$2,500/month to your DTI calculation — even if you're currently paying $0.

For a physician earning $300,000/year ($25,000/month), that student loan burden alone eats up 5-10% of your DTI before your mortgage, car payment, or anything else.

Complex Compensation Structures

Physician income is rarely simple. You might have:

• Base salary
• RVU-based production bonuses (variable quarterly)
• Call pay
• Partnership distributions (for practice owners)
• Stipends for administrative or teaching roles
• 1099 income from locum tenens or expert witness work

Conventional lenders struggle with variable income. They want to see consistent, documentable earnings — and a physician who earned $280,000 one year and $340,000 the next triggers additional underwriting scrutiny, not celebration.

The Training-to-Practice Transition

If you recently finished residency or fellowship, your last two years of tax returns show a salary of $55,000-$75,000. Your current contract might be $350,000+. Conventional lenders use historical income, not projected income, which means your qualifying amount doesn't reflect your actual earning power.

Some lenders offer "physician loans" for primary residences that account for this transition. But physician loan programs for investment properties are rare to nonexistent.

Time Is Your Scarcest Resource

Between clinical hours, charting, CME requirements, and whatever personal life you're trying to maintain, the last thing you need is a 60-day conventional loan process requiring dozens of documents, multiple verification calls, and repeated underwriter questions about your compensation structure.

How DSCR Loans Work for Physicians

A DSCR loan qualifies the property, not you. The calculation:

DSCR = Monthly Rental Income ÷ Monthly PITIA

If the rental income covers the mortgage payment (plus taxes, insurance, and any HOA), you qualify. Your student loans, complex W-2, and DTI ratio are all irrelevant.

For a detailed breakdown, see our guide on what DSCR ratio means.

What Physicians Need to Qualify

Notice: your student loans don't appear anywhere in this table. That's the point.

Real Example: Dr. Patel's First Investment

Dr. Patel is an orthopedic surgeon, two years out of fellowship. She earns $380,000/year but carries $290,000 in student loan debt on an income-driven repayment plan ($0 current payment).

She wants to buy a $425,000 duplex as an investment property.

Conventional loan scenario:

• Monthly gross income: $31,667
• Student loan DTI impact (1% rule): $2,900/month
• Primary mortgage: $3,200/month
• Car payment: $650/month
• Current DTI: 21.3% (before investment property)
• New property PITIA: $2,650/month
• New DTI: 29.7%

She might still qualify conventionally — but the process requires full income documentation, employment verification, explanation of RVU bonuses, and 45-60 days of back-and-forth.

DSCR loan scenario:

• Duplex total rental income (both units): $3,400/month
• PITIA: $2,650/month
• DSCR: 1.28 — Approved in 25 days.

No student loan consideration. No income verification. No employer calls. No explaining what an RVU is to an underwriter.

Why Real Estate Makes Sense for Physicians

Beyond the lending mechanics, real estate investing is particularly well-suited to physicians.

Income Diversification

Medicine is demanding and unpredictable. Burnout rates are high. Having rental income provides a financial cushion — and optionality. Some physicians use real estate to transition to part-time clinical work, pursue administrative roles, or retire earlier than the traditional physician timeline.

Tax Advantages

Physicians are in the highest tax brackets (32-37% federal). Real estate offers tax benefits that few other investments match:

• Depreciation shelters rental income from taxes
• Cost segregation can accelerate depreciation dramatically in the early years
• Mortgage interest deduction on investment properties
• Real estate professional status (REPS): Physicians whose spouses manage rental properties may qualify for REPS, allowing rental losses to offset W-2 income
• 1031 exchanges defer capital gains taxes when selling

These aren't hypothetical savings. A physician in the 37% bracket who generates $50,000 in paper losses through depreciation saves $18,500/year in federal taxes.

Inflation Hedge

Real estate values and rents tend to rise with inflation. For a physician looking at a 25-30 year career, building a rental portfolio creates an asset base that grows in value while generating increasing cash flow.

Forced Savings Discipline

Physician lifestyle inflation is real. High earners often increase spending to match income. Rental property mortgage payments function as forced savings — tenants pay down your loan balance while the property appreciates.

Building a Physician Real Estate Portfolio

Phase 1: First Property (Year 1)

Start with a single-family home or small multifamily (duplex/triplex) in a market you understand. Use a DSCR loan with 25% down. Focus on learning: tenant screening, property management, maintenance coordination.

Target numbers:

• Purchase price: $300,000-$500,000
• Down payment: $75,000-$125,000
• Monthly cash flow: $300-$600
• DSCR: 1.15+

Phase 2: Scale (Years 2-4)

Add 1-2 properties per year. Each property qualifies independently with DSCR, so your growing portfolio doesn't create a DTI ceiling. Consider hiring a property manager once you hit 3-4 units — your clinical time is worth more than the 8-10% management fee.

Phase 3: Optimize (Years 5+)

Refinance properties that have appreciated significantly. Use 1031 exchanges to trade smaller properties for larger ones. Consider commercial multifamily (5+ units) as your experience and capital grow.

Portfolio target for financial independence:

• 8-12 properties generating $400-$600/month each in cash flow
• Total monthly cash flow: $4,000-$7,000
• Equity built: $500,000-$1,000,000+

This won't replace your physician income, but it creates optionality. You work because you want to, not because you have to.

Calculations: Single-Family vs. Duplex

Let's compare two common physician investment strategies.

Option A: Single-Family Home

• Purchase price: $375,000
• Down payment (25%): $93,750
• Loan amount: $281,250
• Rate: 7.25%
• Monthly P&I: $1,918
• Taxes: $310/month
• Insurance: $140/month
• Total PITIA: $2,368
• Rental income: $2,800/month
• DSCR: 1.18
• Monthly cash flow: $432
• Cash-on-cash return: 5.5%

Option B: Duplex

• Purchase price: $450,000
• Down payment (25%): $112,500
• Loan amount: $337,500
• Rate: 7.25%
• Monthly P&I: $2,302
• Taxes: $375/month
• Insurance: $175/month
• Total PITIA: $2,852
• Rental income (2 units × $1,800): $3,600/month
• DSCR: 1.26
• Monthly cash flow: $748
• Cash-on-cash return: 8.0%

The duplex requires more capital upfront but delivers a higher DSCR and better cash-on-cash return. Multifamily properties tend to perform better on the DSCR metric because of multiple income streams.

Physician-Specific Considerations

Disability Insurance and Real Estate

Physicians rely heavily on their earning power. Rental income provides a form of disability hedge — if you can't practice medicine, the properties still generate income.

Malpractice and Asset Protection

Hold investment properties in an LLC. DSCR loans allow this. An LLC creates a legal barrier between your investment assets and potential malpractice claims (though this varies by state — consult an attorney).

Practice Ownership Transition

If you're buying into a practice, your capital is being deployed there. DSCR loans with 20-25% down are less capital-intensive than you might think relative to physician incomes, and can run parallel to practice buy-in timelines.

Locum Tenens and Contract Physicians

If you do locum work, your income is highly variable and documented on 1099s. Conventional lenders struggle with this. DSCR lenders don't care — the property is the borrower, not you.

Mistakes Physicians Make in Real Estate

Analysis paralysis. You're trained to be thorough and evidence-based. That's great in medicine. In real estate, waiting for the perfect deal means missing good deals. A property with a 1.15 DSCR and solid fundamentals is better than a theoretical property you never buy.

Overspending on "nice" properties. Luxury rentals in expensive neighborhoods often have worse DSCR ratios than modest properties in working-class areas. You're not living there — buy for cash flow, not prestige.

Self-managing when you shouldn't. Your time is worth $150-$500/hour clinically. If managing a property takes 5 hours/month and a property manager charges $200/month, the math clearly favors hiring someone.

Ignoring reserves. Unexpected expenses happen. Budget 3-6 months of PITIA as reserves per property, plus a maintenance fund of 5-10% of monthly rent.

For a full overview of DSCR loan mechanics and strategies, read our DSCR loan guide.

Get Started with HonestCasa

At HonestCasa, we work with physicians at every career stage — from fresh attendings to seasoned practice owners. We understand that your financial profile is more complex than a standard borrower's, and we know that DSCR loans often make more sense for physicians than conventional investment property mortgages.

No student loan penalties. No income verification. No explaining your RVU structure to an underwriter. Just the property's income and your investment goals.

You spent years training to help other people. Let your investments start helping you.

Apply now at HonestCasa and get pre-qualified for a DSCR loan in minutes.