Investment Property Loans For Physicians [Explained]

Investing in real estate is one of the best ways to build wealth and generate passive income—the kind that keeps flowing even when you’re not working.

As a physician, you have a unique advantage in this space.

Lenders look at doctors as low-risk borrowers thanks to stable income, clear earning trajectory, and job security—even if you carry student debt or haven’t been practicing for long.

This can open doors to financing options and investment opportunities that others may struggle to access.

However, investment property loans work differently from traditional mortgages.

You need to understand how these loans work—and which options will help you as a physician—to turn your first (and next) property into a profitable investment.

What Are Investment Loans?

Investment loans are specialized financing options that help you buy properties to generate income or build wealth.

These loans are not intended for owner-occupied homes, such as primary residences.

Properties you can purchase using an investment loan include rentals, vacation homes, commercial real estate, apartment buildings, or fix-and-flip projects—whether single-family or multi-family.

Unlike primary residence/first-home loans, investment loans usually require a larger down payment.

They also have higher interest rates and stricter requirements for credit scores, debt-to-income (DTI) ratios, and cash reserves.

This means you need to have a stable source of income before going for these loans.

Why Physicians Are the Right Candidates for Investment Property Loans

If you’re looking to get an investment property mortgage, you need to be financially stable, have a high earning potential, and a long-term career outlook.

As a physician, you’re in a unique position where you have all of these—even if you are still in debt.

Physicians have a higher-than-average income, which helps them qualify for larger loan amounts and manage higher monthly payments.

This earning potential increases over time as they progress in their careers.

Lenders factor in your ability to make money—whether through locum tenens, hospital work, or consulting—when assessing your loan application.

This means that even if you have debt from medical school and don’t have much saved up, you may be able to get loans that would be deemed too risky for people in other occupations.

Types of Investment Loans Available to Physicians

The six types of investment loans available to you include:

1. Conventional Loans

Conventional loans are one of the most common types of financing for investment properties.

They’ll usually have the following requirements:

• At least a 30% down payment
• High credit score requirements
• At least six months of cash reserves to cover the loan in case the property doesn’t generate rental income immediately

As a physician, you may have a financial profile that meets all these requirements.

Here are the conventional loans you’ll have access to:

• Adjustable-rate mortgages (ARMs). These are loans with a low fixed interest for an initial period (5-10 years). Once that period ends, the rate adjusts based on market conditions, which may cause your monthly payments to fluctuate. These are great if you plan to sell or refinance before the rate adjusts.
• Fixed-rate mortgages. These come with a fixed interest rate, which makes for consistent monthly payments over the life of the loan—usually 15 to 30 years.
• Jumbo loans. These are usually for high-value properties that exceed the loan limits set by the Federal Housing Finance Agency (FHFA). As a result, they have stricter credit score requirements, higher down payments, and high interest rates.

2. Physician Mortgage Loans

Physician mortgage loans are for doctors, dentists, and other high-earning medical professionals.

They help you access loans with low to no down payments—often as little as 0%—and no private mortgage insurance (PMI), which is standard when you put down less than 20%.

While most physician mortgage loans are used to help medical professionals buy their primary home, you may be able to use these loans to finance investment properties.

This would, however, require you to find specific lenders—preferably those with whom you have a familiar relationship.

You may also have to pay higher interest, put down a larger down payment, and meet stricter repayment terms if you find a lender offering this loan.

3. Hard Money Loans

A hard money loan works best for short-term real estate investments, especially if you plan to flip a property.

It’s financed by private lenders, not banks, so this type of loan often has flexible terms.

Unlike a conventional investment property loan, these loans focus more on your property’s potential value after renovations—called the after-repair value (AVR)—than on your personal credit or income.

You can qualify even if you have poor credit.

This is why investors often use these loans to buy run-down properties, make quick improvements, and sell them fast for a profit.

You can also use this loan to bridge the gap while waiting for long-term property financing, but that’s less common.

While a hard money loan can help you start a flip, it also comes with high interest rates (around 10-18%), steep origination fees, short repayment periods (usually 12 months or less), and overall high fees.

This can eat into your returns, especially if renovations or sales drag on longer than planned.

4. HELOCs

A home equity line of credit (HELOC) allows you to borrow against the equity in your primary residence to fund an investment property.

This home equity loan works like a revolving line of credit; you can borrow what you need, when you need it, up to a set limit.

The limit is usually up to 80% of your home’s equity value.

As you repay the loan, funds become available again and you can make further investments.

You only pay interest on the amount you withdraw, not the entire credit line.

This makes it easier for you to get millions in loans without having to meet incredibly strict lender requirements.

Since your primary residence backs the loan, failure to repay can lead to foreclosure.

You also have to deal with monthly payments having variable interest, which can make it harder to predict your costs.

5. Commercial Loans

Commercial loans are financial options that help you finance strictly multi-unit residential buildings, office spaces, retail centers, warehouses, or mixed-use developments.

They usually focus on income-generating properties, not single-use homes or owner-occupied residences.

Unlike traditional home mortgages, commercial loans range from 5 to 20 years, with longer amortization schedules.

This means that monthly payments are based on a longer payoff period, but the loan may still be due as a lump sum (balloon payment) at the end of your loan term.

These loans have higher borrowing limits, longer repayment terms (which means lower monthly payments), and competitive interest rates—which can work in your favor if you have strong credit and a solid long-term plan.

Unfortunately, while commercial loans offer ease of financing if you want to invest in expensive real estate, they have very strict criteria.

To qualify, you’d usually need detailed financial documents, business plans (to help lenders understand how you’ll pay off the loan), high interest rates, and large down payments.

You may also have to contend with a long approval process, which means more lost opportunities.

6. Seller Financing

Seller financing is when the seller of the property you want to buy acts as your lender and gives you a loan.

This means that instead of applying for a mortgage through a bank, you negotiate terms directly with the seller.

You’ll agree on an interest rate, monthly payments, and a repayment schedule—similar to a standard loan.

The seller will hold the property’s title until you pay off the loan or refinance later.

This makes it easier to invest in properties if you have income gaps—such as if you just came out of residency.

However, sellers will often charge more interest than banks, which can increase your overall cost.

Some may also require a lump sum at the end, which may force you to refinance or sell.

Questions to Ask When Choosing an Investment Loan

A loan with attractive terms can look like the perfect fit on paper, but that doesn’t always mean it will work for you in the long run.

What may seem manageable now could strain your finances later if cash flow dips, expenses rise, or the repayment timeline becomes tighter than expected.

While your financial profile as a physician will open doors to better investment property loan options, choosing the wrong one can still limit your returns—or even put your assets at risk.

That’s why you should always look at the potential impact of a loan on your financial stability and long-term goals.

Here are some questions to ask:

• Why do you want the loan? Do you want to flip properties for short-term profits, generate passive income through rental properties, or diversify your portfolio for long-term wealth building?
• Do you have enough cash reserves to cover the down payment, closing costs, and unexpected expenses?
• Can you comfortably manage monthly payments, even if the property is temporarily vacant or rental income fluctuates?
• How quickly do you need funding? Are you going for a time-sensitive investment like a fix-and-flip project or a long-term investment like a multi-use complex?
• Are you prepared for potential upheavals, like interest rate changes or tenant vacancies? Can your personal or practice finances absorb temporary cash flow disruptions?
• Will taking on additional debt affect your ability to get future loans for your practice or personal needs?

Tips for Physicians Looking for Investment Property Loans

If you’ve decided to fund investment property using loans, here are two tips to help you through the process:

1. Start Small and Scale Slowly

Instead of going for the biggest loans just because you can afford them, start with a smaller loan to gain experience and minimize risk.

You can begin with an investment in a single-family rental home or a small multi-unit/multi-use property.

A HELOC, physician loan, or conventional loan could help you finance this.

Once you learn the ropes of property and cash flow management without overextending yourself financially, you can apply for commercial loans for large-scale projects.

2. Talk to a Financial Advisor

Real estate financing often gets complicated—especially when you’re juggling medical license prep, hospital shifts, student loans, and practice-related costs.

Talking to a financial advisor—preferably someone familiar with physicians’ unique financial situations—will help you understand your loan options and how each might impact your goals.

Your advisor will also break down the implications of variable rates, balloon payments, or using home equity to help you avoid decisions that could hurt your cash flow or personal assets later.

Find Investment Property Loans That Fit Your Financial Position With Physicians Thrive

As a physician, your earning potential gives you an edge in property investment, but choosing the wrong loan can still cause you unnecessary stress—or worse, financial setbacks.

Before you commit, you need to look beyond the interest rate and understand how each loan will affect you.

This is where we come in.

At Physicians Thrive, we help physicians find investment property loans that help them build equity in the long term.

Our advisors always start by looking at your financial position, goals, and risk tolerance before providing loan options that will help you fund your investment properties without impacting your personal or practice finances.

Want to learn how we can help you fund your way to wealth? Give us a call today!