DSCR loan or HELOC for buying my next investment property?

DSCR loan if buying a new property; HELOC if you have equity in another property and want flexible access. Often combined: HELOC funds the down payment, DSCR finances the new acquisition.

These are different products that often work together rather than against each other. A DSCR loan is a first mortgage on a new investment property purchase or refinance, qualifying on the property's rental cash flow. A HELOC is a second-lien revolving credit line on an existing property (primary residence or investment) that you already own, qualifying on borrower DTI and combined LTV. Common combination: tap a HELOC on your primary residence or another rental to fund the down payment on a new investment property, then DSCR-finance the new acquisition. Effectively this is 100% financing across the two loans, with the HELOC variable-rate piece exposed to rate rises but reusable as you pay it down. Pure DSCR-only path: 25-30% down on a new acquisition (no HELOC). Pure HELOC-only path: doesn't work for an arms-length purchase since you can't buy a separate property with HELOC alone unless the HELOC LTV is large enough to fund the entire purchase. Decision math: combined cost (HELOC variable rate + DSCR fixed rate, weighted by balance) versus the rate on a pure-DSCR 30-year fixed at lower LTV.