Loan Comparison

Side-by-side breakdown of every loan type — pros, cons, and quick comparison.

Fix and Flip Loans

DSCR Rental Loans

Quick Comparison

Feature	Bridge Loan	Fix & Flip	DSCR Loan
Purpose	Short-term gap	Rehab + resale	Rental hold
Term	6–24 months	6–12 months	30 years
Speed	Fast	Fast	Moderate
Based On	Asset value	ARV	Rental income
Rehab Funds	Sometimes	Yes	No
Rates	High	High	Medium
Exit Strategy	Required	Required	Not required
Min. FICO	650	650	650
Max LTV	75%	75%	80%
Min. Loan	$50,000	$50,000	$75,000

Pros & Cons by Loan Type

Bridge Loan

✅ Pros

→Fast closings (often 7–14 days)
→Flexible underwriting (asset-based)
→Interest-only payments → better short-term cash flow
→Great for competitive markets (acts like cash)
→Can be used for stabilization before refinance

❌ Cons

→Higher interest rates (typically 8–12%+)
→Short terms (6–24 months)
→Origination fees (1–3+ points)
→Requires a clear exit strategy (refi or sale)
→Risk if market shifts or refinance falls through

Best for:Quick acquisitions, distressed properties, or timing gaps

Fix & Flip Loan

✅ Pros

→Funds both purchase + rehab costs
→Leverage: Often 60–75% purchase, 100% rehab
→Fast approval/closing
→Based on ARV (After Repair Value), not just current value
→Draw structure helps manage rehab budget

❌ Cons

→Higher rates & fees than traditional loans
→Short term (typically 6–12 months)
→Requires project management + timelines
→Draw process can delay access to rehab funds
→Risk of overruns or market downturn

Best for:Flippers, value-add investors, BRRRR strategy

DSCR Loan

✅ Pros

→No personal income verification (no W2s, tax returns)
→Qualifies based on rental income
→30-year fixed options available
→Ideal for scaling rental portfolios
→Can close in LLC/business name

❌ Cons

→Requires property to cash flow (DSCR ≥ ~1.0–1.25)
→Higher rates than conventional loans
→Larger down payment (usually 20–25%)
→Prepayment penalties common (3–5 years)
→Not ideal for heavy rehab projects

Best for:Buy-and-hold investors, long-term rentals, portfolio growth

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