Question, fix and flip loan or DSCR

[Art Schneider]

I am a real estate investor and presently have long-term rentals that were purchased with DSCR loans.

Looking at buying a fixer-up that needs major rehab with a fix& flip loan and then 3 months later converting to a dscr loan 

pros and cons?

[Kyle Mccaw]

@Art Schneider 

You're on the right path — that's the core of the BRRRR model. We do this all the time.

Pros:

• You preserve cash by financing the rehab.

• You can recycle your capital fast if the ARV and appraisal come in strong.

• DSCR lenders don't care about your personal income — just the property's performance.

Cons:

• Timing is everything. Some DSCR lenders won't let you refi before 6 months (seasoning), so confirm that upfront.

• If the rehab goes over budget or timeline, your hard money interest racks up fast.

• Appraisal risk — if the ARV misses, your cash-out will fall short.

Just make sure you're using reliable contractors and budgeting conservatively. This strategy works beautifully when executed right.