Insignia Mortgage co-founder Damon Germanides on the commercial products investors want and where brokers should specialize
Demand from real estate investors has shifted noticeably over the past year, and it has changed in a way that plays directly into a broker's hands. Affordability is still keeping a lot of would-be buyers on the sidelines, which pushes more of them into the rental pool. That is holding rents up and vacancy down in a lot of submarkets, and it is exactly the kind of environment that makes an investor want to buy rather than wait. Here in Southern California, that shows up as compressed cap rates and buyers who are underwriting for operational efficiency rather than pure appreciation, since the easy money that came from rising values alone is gone. The opportunity for brokers is that this demand is not showing up as conventional purchase business. It is showing up as portfolio growth, cash-out refinances and financing on assets that do not fit neatly into a bank's underwriting box.
Where it gets interesting is that this is no longer a niche corner of the market. Non-QM investor lending, and debt service coverage ratio (DSCR) loans in particular, have moved from a specialty product a few years ago to one of the fastest-growing business lines as big lenders crash the DSCR party, with forecasts putting non-QM originations well above where they stood just a year earlier. Large conventional lenders that stayed out of this space for years are now building DSCR programs of their own, which tells you where the volume is heading. When that much capital and that many lenders start paying attention to a product category, brokers who already understand it have a real head start.
The products investors are asking for
The clearest demand right now is for DSCR financing, loans underwritten on a property's rental income rather than the borrower's personal tax returns. It is the product that makes sense for a self-employed investor, someone building a short-term rental portfolio, or a client who simply does not want to hand over two years of returns to prove they can carry a mortgage. Beyond DSCR, I am seeing steady interest in interest-only structures on one-to-four unit investment properties, cash-out refinances that let owners pull equity without resetting a favorable underlying loan, and blanket or cross-collateralized financing for investors consolidating several properties under one facility.
On the commercial and multifamily side, bridge and fix-and-flip financing continues to matter for investors moving quickly on value-add deals. Brokers who can speak fluently across that full menu, rather than defaulting to one product, are the ones major lenders are betting on, and why brokers should lean in too.
“Investors don’t want a broker who only knows one loan type. They want someone who can look at the whole picture, the property, the entity, the exit, and tell them which structure actually fits.”
What it takes to work this niche well
This is a relationship business as much as a product business. Knowing the underwriting mechanics of a DSCR loan matters, but so does understanding rental comps, cap rate trends and how vacancy is moving in the submarkets your clients are buying into, the kind of regional valuation challenges that trip up lenders unfamiliar with local multifamily markets. In a market like Los Angeles, where regulatory conditions and rent control rules can shape a deal as much as the numbers do, that local knowledge is not optional. The brokers who do this well tend to build a bench of private and non-bank lending partners, because no single lender fits every investor profile, and they stay close to the property managers, 1031 exchange intermediaries and commercial real estate brokers who see these deals before anyone else does. That referral network matters more here than in almost any other part of the business, because investor clients tend to keep buying, and a broker who structures the first deal well usually gets the next five.
Where deals get complicated
The friction usually shows up in three places. Valuation gets harder when part of a property's income comes from short-term rental platforms rather than a signed lease, and lenders vary widely in how much of that income they will credit. Timelines get tight when a client is coming out of a 1031 exchange and has a hard deadline to close. And ownership structure adds another layer, since most serious investors are buying through an LLC or limited partnership, which changes documentation and, in some cases, pricing. The best approach is to get ahead of all three early: line up a lender who explicitly underwrites short-term rental income before you need one, build closing timelines around the exchange deadline rather than a generic 30-day estimate, and confirm vesting and entity requirements at application, not at the closing table.
None of this is complicated in theory. It just rewards brokers who have done the homework before the client calls, not after.
