Loans in Ohio for 1-4 Unit Rentals 2025 Now

Fix and Flip Construction Loans in Ohio: 2025 Guide to Financing 1-4 Unit Rentals

Ohio’s real estate market in 2025 remains a top destination for both novice and seasoned investors seeking robust returns on residential properties. Fix and flip construction loans are powerful tools for leveraging opportunities across the Buckeye State’s diverse neighborhoods. Whether you’re targeting a single-family home in Columbus or a fourplex in Cleveland, specialized financing is available to help you purchase, rehab, and convert properties into cash-flowing rentals or lucrative resale projects.

Table of Contents

• Overview of Fix & Flip and Construction Loans
• Ohio Market Intelligence: Best Investment Areas in 2025
• Top Lenders for 1-4 Unit Rental Financing in Ohio
• Loan Types for 1-4 Unit Investment Properties
• Step-by-Step Application Process
• Ohio Fix & Flip Success Stories
• Frequently Asked Questions

Overview of Fix & Flip and Construction Loans

Fix and flip loans are short-term, specialized financing designed for investors buying, renovating, and quickly reselling or refinancing residential properties. In 2025, construction loans and fix & flip financing cater specifically to the brisk demand for updated 1-4 unit rental housing across Ohio. Key characteristics include:

• Short-term: Typical loan terms of 6-18 months, with extensions available
• Loan-to-Value (LTV): Up to 85% of purchase price, and up to 100% of renovation costs (subject to overall LTC/LTV limits)
• Interest Rates (2025): Ranging from 9%-11% for most fix & flip and construction loans
• Quick Funding: Approval and funding in as little as 7-14 days—ideal for competitive markets
• Asset-based: Approval focused on property value and project potential, not just borrower credit

Ohio Market Intelligence: Best Investment Areas in 2025

Ohio features multiple hot spots for 1-4 unit residential investments. As of 2025, these eight areas offer strong rental demand, growth potential, and attractive acquisition prices for fix and flip or build-to-rent projects:

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Page 1 of 5

Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

Page 3 of 5

What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

Page 4 of 5

Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

Page 5 of 5

Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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• Columbus (Franklinton/Bexley/Clintonville): Urban renewal, high rental absorption, major student/young professional demand.
• Cleveland (Ohio City/Tremont/Detroit-Shoreway): Ongoing revitalization, new restaurants, historic multifamily stock.
• Cincinnati (Over-the-Rhine/Northside): Rapidly gentrifying, walkable, strong appreciation.
• Dayton (South Park/Oregon District): Affordable entry points, post-pandemic migration and job growth.
• Toledo (Old West End/Five Points): Cash flow opportunity for value-add investors.
• Akron (Highland Square/Firestone Park): Recent influx of remote workers, quality school districts.
• Youngstown (Wick Park/YSM District): Low prices, improved rental stability in workforce housing.
• Springfield (South Fountain/Forest Glen): Revitalization grants and historic tax credits fuel attractive ROIs.

Top Lenders for 1-4 Unit Rental Financing in Ohio (2025)

Several lenders provide specialized construction and fix & flip loans for small residential properties throughout Ohio. Notable options include:

1. Kiavi (formerly LendingHome): 1-4 unit fix & flip and rental property loans, fast digital platform
2. RCN Capital: National private lender with Ohio programs for fix & flip and DSCR loans
3. Lima One Capital: Construction and rehab financing for single-family, duplex, triplex, and fourplex
4. Temple View Capital: Focus on rental property investors, up to $2M, flexible terms
5. Centurion Financial: Ohio-based hard money lender, quick closings, strong local market knowledge

2025 Loan Types for 1-4 Unit Investment Properties

The Ohio investment property financing market now offers:

• Fix & Flip Loans: Short-term bridge funding for acquisition, renovation, and resale/refinance
• Construction Loans: For ground-up infill or tear-down/rebuild 1-4 unit projects, draws based on milestones
• Hard Money Loans: Flexible, quick-close loans—often used by experienced investors
• DSCR Rental Loans: Cash-out or long-term refinance based on Debt Service Coverage Ratio—ideal for transitioning flips to rentals
• Rehab Loans: Purpose-built for value-add or heavy renovation, with draws tied to inspections
• Construction-to-Perm Loans: Convert to long-term landlord loans upon project completion

Step-by-Step Application Process

1. Property Identification: Target a 1-4 unit property in a strong rental demand area.
2. Initial Loan Inquiry: Submit a preapproval request to lenders (basic info, credit pull, property address if under contract).
3. Submit Documentation: Provide purchase contract, rehab scope of work, budget, and photos. Business plan and rent comps for DSCR loans.
4. Valuation/Appraisal: Lender orders appraisal (as-is and after-repair value).
5. Underwriting: Lender reviews project viability, borrower experience, credit, and liquidity/reserves.
6. Loan Approval: Issuance of a term sheet/commitment letter with conditions.
7. Closing: Sign all documents, fund down payment/closing costs. Lender funds acquisition and sets up construction draw schedule.
8. Construction/Rehab: Complete work; draws released upon milestone verification.
9. Exit: Sell property for profit or refinance to long-term DSCR loan if keeping as rental.

✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

Page 2 of 5

Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

Page 3 of 5

Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

Page 4 of 5

For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

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What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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Lenders require clear rehab budgeting, proof of contractor competency, and a strong ARV (After-Repair Value) to maximize leverage. Most Ohio projects see approvals for 0-2 prior projects (with enhanced terms for experienced operators).

Ohio Fix & Flip Success Stories (2025)

Case Study 1: Single-Family Home Flip, Franklinton (Columbus)

• Purchase Price: $130,000
• Rehab Budget: $60,000
• Loan Type: Fix & Flip (Lima One Capital)
• Loan Amount: $161,500 (85% LTC, 75% ARV)
• Term: 12 months at 10% interest, 2 points origination
• Exit: Sold for $245,000 (8 months timeline)

Case Study 2: Duplex Remodel/Rental, Tremont (Cleveland)

• Purchase Price: $195,000
• Rehab: $80,000
• Loan Type: Fix & Flip to DSCR (RCN Capital)
• Loan Amount: $233,750 (80% LTC, 70% ARV)
• Refinanced: 30-year DSCR loan at 7.25%, DSCR 1.22
• Rents: $2,400/month

Case Study 3: Fourplex Ground-Up, Old West End (Toledo)

• Land Cost: $50,000
• Construction: $390,000
• Loan Type: Construction-to-Perm (Centurion Financial)
• Loan Amount: $355,000 (65% LTC), two draws
• Exit: Long-term rental loan upon lease-up (at 7.5%)

Frequently Asked Questions

What credit score is required for Ohio fix and flip loans in 2025?

Most lenders prefer a minimum 660 FICO. Hard money and asset-based programs may approve as low as 600 with strong collateral.

Can I finance 100% of my renovation budget?

Yes, many loan programs allow up to 100% of approved rehab costs, capped by ARV/LTV limits (usually 70-75%).

Are interest-only loans available?

Yes, most fix & flip and construction loans are interest-only during the active project term.

How fast can I close?

Streamlined projects can close as fast as 7-14 business days in Ohio, especially with experienced lenders.

Can I use these loans to build a rental portfolio?

Absolutely. Many investors pair fix & flip or construction financing with DSCR loans to build cash-flowing rental portfolios in top Ohio neighborhoods.

Ready to Start? Find the Right Ohio Fix & Flip Lender Today

✅ Real Estate Investor Resources

• AirDNA (Short-Term Rental Data)
  https://www.airdna.co

• Rentometer (Rent Comps)
  https://www.rentometer.com
• Zillow Research & Data
  https://www.zillow.com/research

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

Page 2 of 3

If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

Page 3 of 3

Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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Whether you’re flipping your first home or scaling a rental portfolio, Ohio’s competitive lending landscape in 2025 ensures access to the funding you need for single-family, duplex, triplex, or fourplex opportunities. Compare lenders, prepare your project docs, and maximize your ROI in Ohio this year!

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