With over 300 days of sunshine each year, Arizona is known as one of America’s sunniest states! The abundant sunshine isn’t the only thing that will put a smile on your face: with a growing population and thriving economy, Arizona presents excellent investment opportunities for foreign nationals.
But even for the most well-qualified foreign investor, securing a mortgage and receiving the keys to your new rental property can be difficult. That’s why we founded Waltz: to make the path to rental ownership easier and less stressful for foreign nationals. In this guide, we’ll explore how you can leverage DSCR loans to make smart real estate investments in Arizona, along with key information about investing with help from Waltz.
We are providing the following discussion to you for informational purposes only. All investments, including real estate, involve risk, and we encourage you to invest carefully. The information in this article is not intended to replace or serve as a substitute for any legal, real estate, tax, or other professional advice or service. You should consult with a professional in the respective legal, tax, accounting, real estate, or other professional area before making any decisions or entering into any contracts relating to a rental property.
Foreign investors looking to purchase rental properties in Arizona can benefit from DSCR (debt-service-coverage-ratio) loans, a financing option that prioritizes a property’s income potential rather than your personal financial history.
Unlike traditional loans that require proof of personal income, DSCR loans focus on the property’s ability to generate rental revenue.
These loans fall under the non-qualified mortgage (non-QM) category, making them a great fit for non-U.S. residents who want to invest in U.S. real estate without intending to live on-site. For international buyers, DSCR loans help navigate financial and legal hurdles, opening the door to investment opportunities in rental markets like Arizona.
DSCR loans make it easier for international investors to finance U.S. rental properties. Key advantages include:
For foreign nationals, DSCR loans streamline the investment process, making it easier to acquire profitable properties. That Arizona rental you’ve been considering could be secured quickly–sometimes in less than a month!
Lenders assess several factors when reviewing DSCR loan applications. Understanding these requirements can help streamline the process and improve approval chances.
Most lenders: Many U.S. lenders prioritize income earned within the country since it’s easier to verify. Foreign income often requires additional paperwork, such as translated bank statements, proof of salary, and U.S. tax returns if applicable. Even with full documentation, approvals can be challenging due to lenders’ unfamiliarity with international financial systems.
Waltz: We recognize that income sources vary. Whether your earnings come from the U.S. or abroad, we review a broad range of documents, including foreign bank statements, employer pay slips, and existing rental income. Additionally, we consider the potential rental revenue of the property you’re purchasing, ensuring a more comprehensive evaluation.
Most lenders: Many lenders require foreign investors to put down 30-50% of the property’s purchase price. Some also insist on additional cash reserves to cover unexpected costs, increasing the upfront investment.
Waltz: We’re more flexible than your average lender. While a 30% down payment is typical, qualified borrowers may be eligible for a lower 25% requirement. We also adjust reserve fund expectations based on your financial profile and the rental income potential of the property.
Most lenders: U.S. lenders generally require a passport and visa for identification. If purchasing as an investor, you may also need to form a U.S.-based LLC, which involves submitting an operating agreement and other business documents.
Waltz: We simplify this step for international buyers. A valid passport is all that’s needed for identification. If an LLC is required, our Investor Toolkit guides you through the setup process, including obtaining an Employer Identification Number (EIN) in minutes.
Most lenders: U.S. lenders primarily rely on domestic credit scores, making it difficult for foreign investors without a U.S. credit history to secure financing. This is true even if they have strong credit in their home country.
Waltz: We understand that building U.S. credit takes time. Instead of requiring a domestic credit score, we review your home country’s credit profile along with other financial indicators to fairly assess your eligibility.
Find out how international investors have benefited from working with Waltz.
Arizona’s real estate landscape offers diverse investment options, each suited to different strategies. The best property for you will depend on your financial goals and lender requirements. Here are a few property types to consider:
Arizona real estate offers a unique blend of opportunities. The state is known for its strong economy and diverse job market and continues to attract domestic and international investors. Here are a few reasons why Arizona commands investors’ attention:
Arizona boasts several dynamic cities presenting excellent investment opportunities for foreign nationals. Here are some of the state’s top real estate markets:
As Arizona’s state capital and largest city, Phoenix offers a thriving economy, diverse housing options, and a strong rental market. Phoenix is home to many lucrative sectors like technology, healthcare, and manufacturing, with major developments underway that are expected to create tens of thousands of jobs and spur rental demand. The Phoenix real estate market has experienced significant appreciation, with property values increasing by over 280% since 2000. Rental demand remains strong, supported by a growing population and a favorable tax environment.
Tucson is Arizona’s second-largest city and is well-known for its rich history, cultural attractions, and affordability (2% below the statewide average). Home prices are generally lower in Tucson than in Phoenix, providing an accessible entry point for investors. The University of Arizona is based here, and the college’s 42,000 students help keep rental demand high. Finally, Tucson residents enjoy a growing job sector and a high quality of life, only increasing its appeal for residents and investors alike.
An upscale city located 12 miles from the heart of Phoenix, Scottsdale is renowned for its luxurious lifestyle, upscale real estate, and world-class resorts. Scottsdale may fit your portfolio if you have more money to spend – the average property price hovers around $830,000. Despite the larger up-front cost, Scottsdale presents opportunities for short-term vacation rentals, thanks to its booming tourism industry, which is expected to bring in $36 million in 2025. Scottsdale also has a growing retiree population, many of whom are interested in traditional rentals over homeownership.
A suburb of Phoenix, Chandler is considered the third-fastest growing city in America. Chandler provides both lucrative job opportunities and family-friendly neighborhoods, two things that appeal to tenants. Chandler is home to several major tech companies, including Intel, which employs 12,000 people. Chandler is also consistently ranked as one of the safest cities in Arizona, and the local school district is one of the best in the nation. There is no doubt about it – investors looking for real estate income will find Chandler appealing.
If student rentals interest you, Tempe, Arizona, may be a great fit for you. Tempe is home to Arizona State University (ASU), which has the largest student body in the nation, with over 65,000 undergraduates. The youthful population and growing job market make Tempe a great option for rental property investors seeking strong rental yields.
Arizona real estate can be a goldmine, but there are some things to watch out for. Here are some things to consider before diving headfirst into an Arizona investment property:
Refinancing your Arizona investment property means replacing your existing mortgage with a new one – often to secure better loan terms or access your property’s equity for future investments. At Waltz, we offer streamlined refinancing solutions designed to help Arizona real estate investors navigate this process with confidence. Whether you’re looking to lower your mortgage rate or unlock capital for new opportunities, we ensure a smooth and efficient experience. The refinancing process for foreign nationals typically includes:
A rate-and-term refinance allows you to adjust the terms of your existing mortgage. This helps you to potentially secure a lower interest rate or a more favorable loan structure. Keep in mind that while a lower rate can reduce your monthly payments, the total finance charges over the life of the loan may still be higher, depending on the new terms.
A cash-out refinance enables foreign investors in Arizona to access their property’s equity by borrowing more than their current mortgage balance. The additional funds can be used for property renovations, expanding your investment portfolio, or other financial needs. By reinvesting this capital, investors can scale their real estate holdings without needing to secure entirely new funding sources.
Learn more about refinancing.
Waltz makes the process of securing a DSCR loan simple. Just follow these steps:
1. Find a profitable investment
Determine your investment goals, whether you’re targeting long-term rental income, a vacation rental, or a future resale opportunity. Choose a property that aligns with your budget and financial objectives.
2. Gather essential documents
Gather essential paperwork, which will include a valid passport, proof of income (such as bank statements or employer pay slips), and details about the property you’re purchasing. Having everything ready will make the process faster and less stressful.
3. Select a lender experienced with foreign nationals
Select a lender who understands the unique challenges international buyers face. Waltz specializes in guiding foreign nationals through the U.S. mortgage system with tailored solutions.
4. Set up an LLC and U.S. bank account2
For investment properties, setting up a U.S.-based LLC and opening a local bank account is typically required. This process is straightforward, and Waltz can assist in forming your LLC and obtaining an Employer Identification Number (EIN).
5. Submit your loan application
Once you have all of your documents together, it’s time to submit your DSCR loan application. Before you send it off, double-check that all paperwork is complete and accurate.
6. Perform due diligence
Before finalizing the purchase, inspect the property, verify its market value, and review the loan terms carefully. This step ensures your investment aligns with your expectations.
7. Complete the purchase process
Once all requirements are met, sign the final paperwork, complete the fund transfer, and officially secure your new investment property. Congratulations – you own property in Arizona!
