Construction Loans in Ohio for Rentals 2025 Now

Fix and Flip Construction Loans in Ohio: 2025 Guide for 1-4 Unit Rental Properties

Ohio’s residential investment market is thriving in 2025, presenting new opportunities for savvy investors looking to acquire, renovate, or construct single-family homes, duplexes, triplexes, and fourplexes. With a robust rental demand and property values steadily increasing in key Ohio cities, understanding your financing options—especially fix & flip and construction loans—is essential for maximizing your ROI.

Table of Contents

1. Ohio Investment Property Market Overview 2025
2. Types of Loans for 1-4 Unit Rentals
3. Top Neighborhoods for Fix & Flip and Rentals in Ohio
4. Leading Lenders for Fix & Flip and Construction Loans in Ohio
5. How to Apply: Step-by-Step Process
6. Success Stories: Real Ohio Deals in 2025
7. Ohio Fix & Flip Loan FAQs

Ohio Investment Property Market Overview 2025

In 2025, major Ohio metros like Cleveland, Columbus, and Cincinnati continue to attract investors due to affordable entry points and resilient rental demand. According to Ohio REALTORS®, the median residential home price rose 4.9% year-over-year, and vacancy rates remain historically low, especially for renovated 1-4 unit properties. The revitalization of urban neighborhoods and significant infrastructure spending are drawing both local and out-of-state capital.

Why Invest in Ohio Rentals?

• Strong cash flow potential, especially in emerging neighborhoods
• Lower acquisition costs compared to coastal markets
• Robust tenant demand from students, young professionals, and families
• High cap rates (typically 7-10%+ for well-renovated small multi-family properties)
• Active state and municipal incentives for certain rehab and new construction projects

Types of Loans for 1-4 Unit Rental Properties

Whether you’re looking to buy and rehab a property or construct a new build, Ohio investors have access to a range of specialized loan products in 2025.

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.

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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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1. Fix & Flip Loans

• Short-term (6–18 months)
• Up to 85% LTV (purchase)/ 100% of rehab costs
• Ideal for quick renovations and resale
• Interest-only payments until sale or refinance

2. Construction Loans

• Finance the ground-up build or major structural additions
• Funds released in stages (draws) as project milestones are completed
• Loan amounts from $75,000 to $2,000,000+
• Convertible to permanent financing (construction-to-perm)

3. Hard Money Loans

• Asset-based lending with flexible underwriting
• Fast closings (as little as 7-14 days)
• Often used for properties that do not qualify for traditional loans due to condition
• Rates typically 8.5–11% in 2025, points vary by project

4. DSCR Rental Loans

• Long-term (30-year) financing for stabilized 1–4 unit rentals
• Qualification based on Debt Service Coverage Ratio instead of personal income
• Ideal for refinancing fix & flip projects into permanent rentals
• LTV up to 80%, fixed and adjustable rates available

Top Neighborhoods for Fix & Flip & Rental Investment in Ohio (2025)

Strategically choosing your market is just as important as your financing. Here are top performing investment areas across Ohio for 1-4 unit rental projects in 2025:

• Ohio City (Cleveland) – Vibrant, walkable, and seeing significant new construction alongside historic rehabs.
• Grandview Heights (Columbus) – High-demand, family-centric, excellent appreciation trends for single-family and duplexes.
• Over-the-Rhine (Cincinnati) – Urban revitalization hot spot, strong rental yields for well-renovated multi-units.
• Clintonville (Columbus) – High rental demand driven by proximity to universities, popular for small multifamily projects.
• Short North (Columbus) – Premier location for luxury rehabs and boutique fourplexes.
• Dayton’s South Park – Affordable acquisition, plenty of distressed inventory, ideal for value-add.
• Kettering (Dayton Metro) – Stable rental base, fast-turning properties for fix & flip.
• North Collinwood (Cleveland) – Up-and-coming for first-time investors; city grants available for some rehab projects.

Top Fix & Flip and Construction Lenders in Ohio (2025)

Below are reputable lenders offering tailored products for Ohio’s 1-4 unit property investors:

• Lima One Capital – Offers fix & flip, new construction, and DSCR rental loans. Fast draws and competitive rates, known for working with first-time investors.
• Kiavi (formerly LendingHome) – Streamlined online application, quick closings, focus on smaller balance fix & flip loans.
• CoreVest – Popular for rental DSCR and portfolio loans, also funds major construction projects.
• RCN Capital – Flexible minimum credit score requirements, strong for duplexes/triplexes/fourplexes.
• Constructive Loans – Excellent for ground-up construction and construction-to-perm solutions.
• Local: Green Day Funding – Ohio-based private lender, specializes in hard money for distressed 1-4 unit properties.

Step-by-Step: Application Process for Ohio Fix & Flip, Construction & DSCR Loans

1. Pre-Qualify Online
   • Choose your preferred lender’s quick application portal.
   • Provide basic deal info: property address, project scope, purchase price, estimated rehab/construction costs.
2. Submit Lending File
   • Borrower ID (driver’s license, entity docs if LLC)
   • Personal and/or business credit report
   • Renovation or construction budget (line-item scope works best)
   • Contractor bids, project timeline, exit strategy (sell vs. hold for rental)
3. Get Pre-Approval & Underwriting
   • Pre-approval usually within 24-48 hours
   • Appraisal and/or “as-completed” value analysis
   • DSCR loans require projected market rents and lease, if available
4. Sign Loan Docs & Close
   • Finalize terms (rate, points, draw schedule, recourse/non-recourse status)
   • Title, hazard insurance, and, if required, builder’s risk coverage
   • Closing at local title company or via remote notary
5. Rehab/Construction Phase
   • Funds disbursed in draws, triggered by site inspections as phases are completed
   • Ongoing support from lender’s construction management team
6. Sale or Refinance (Exit)
   • Sell and repay loan (fix & flip), or refinance to long-term loan/DSCR product
   • Some lenders offer construction-to-perm options, converting to a 30-year rental loan automatically at project completion

Ohio Investor Success Stories (2025)

✅ 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.

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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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Case Study 1: Duplex in Clintonville, Columbus
Sarah, an experienced investor, acquired a distressed duplex for $185,000. Lima One Capital provided a $265,000 fix & flip loan (purchase + $65K rehab), interest-only, 9.2% for 12 months. After a $60,000 renovation, both units rented quickly for $1,750/month each. Sarah refinanced into a 30-year DSCR loan at 7.1% (CoreVest), pulling out $42,000 cash and achieving a stabilized cash-on-cash return above 18%.

✅ 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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Case Study 2: Fourplex New Construction – Cincinnati (Over-the-Rhine)
Building from ground up, Michael used Constructive Loans for a $500,000 construction-to-perm loan (80% LTC), covering hard costs and soft costs. The fourplex was completed in 7 months and immediately rented to young professionals. Permanent loan converted at project completion, locking in a 30-year fixed at 6.9% with a DSCR of 1.35.

Case Study 3: Quick Flip in Cleveland’s Ohio City
Deanna purchased a single-family shell for $74,000 with a $110,000 hard money loan from Green Day Funding, investing $40K into renovations over five months. Property sold for $192,000. Her total carrying costs (interest, points, closing) were under $11,500, netting a pre-tax profit over $50,000.

Ohio Fix & Flip & Construction Loans: FAQ (2025)

• Minimum Credit Score? – Most lenders require 620+; some hard money lenders will go lower if the deal is strong.
• Down Payment Required? – Typically 10-20% of purchase price for fix & flip; construction loans require 15-25% equity in the project.
• Interest Rates? – Fix & flip/hard money: 8.5-11%. Construction: 8-10%. DSCR/rental: 6.7-7.5% for 30-year loans (as of Q2 2025).
• Loan Amounts? – From $75,000 (small single family rehab) up to $2,500,000+ for complex projects or portfolios.
• Prepayment Penalties? – Fix & flip and construction: usually none. DSCR (rental): typically 1-3 years of small prepay penalty.

Get Started with Ohio Investment Property Loans in 2025

With Ohio’s economy and rental market on the rise, 2025 is the perfect year to launch or expand your fix & flip or rental portfolio with the right financing. Whether you’re targeting a quick single-family flip in Ohio City or ground-up construction of a fourplex in Columbus, start by partnering with one of the state’s reputable lenders for a smooth, profitable project lifecycle.

Always consult with a local real estate attorney or CPA to tailor your strategies to Ohio’s legal and tax environment.

Get a No Obligation Quote Today.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

Contact GHC Funding Today. Main: 833-572-4327 Email: sales@ghcfunding.com

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