Mixing Short-Term & DSCR Loans – Has Anyone Tried It?

Question

I’ve noticed some investors combining short-term financing for acquisition/rehab, then refinancing into DSCR loans for the long-term. Has anyone here tried this hybrid approach? Curious to hear if it’s helped your cash flow or slowed down the process.

Erik Estrada · Answer

Hey Brandon!

This is actually very common in this space. Most Investors use hard money financing on value add deals and then refi into a DSCR loan. Many DSCR lenders have very little title seasoning requirements, so it will be a lot faster to scale.

Corby Goade · Answer

Sure, I've done that a few times. Sometimes it helps with cash flow, but my strategy is more about leveraging the equity I've built so that I can scale. This question is pretty easily addressed by using a mortgage calclulator. Obviously with DSCR you'll need equity and you'll pay a higher rate, so if the numbers work, do your thing.

Vandana Thapa · Answer

@Brandon Lee Many investors are finding success with a two-step financing strategy: using short-term funds for acquisition and rehab, then exiting into a DSCR loan for the long-term hold. At Ridge Lending Group, we see this approach work well when planned intentionally.Here’s how it typically works:- Acquisition & Rehab: Use a hard money, bridge, or fix-and-flip loan. These move quickly and don’t require stabilized rental income, but come with higher rates and short terms.- Transition: Once rehab is complete and a lease is in place, refinance into a DSCR loan, which is based primarily on the property’s cash flow rather than your personal income.- Cash Flow Advantage: DSCR financing often improves monthly cash flow compared to short-term debt and frees up your debt-to-income ratio for additional properties.- Equity Recycling: Depending on appraisal and seasoning, you may be able to pull out much or all of your original capital and redeploy it into your next deal.- Considerations: Watch for lender seasoning rules (3–6 months in many cases), appraisal risks that could cap your cash-out, and the impact of paying two sets of closing costs.When executed correctly, this hybrid approach allows investors to move quickly on acquisitions, add value through rehab, and then stabilize the property into a sustainable long-term financing structure. With the right planning, this strategy can help grow your portfolio well beyond the first deal.

This response is for educational purposes only and not intended as financial, tax, or legal advice. Always consult your own advisors before making investment decisions

Zachary Deal · Answer

This is the BRRRR strategy and is very popular with investors. When executed properly, it should be a very smooth and efficient process.

Mixing Short-Term & DSCR Loans – Has Anyone Tried It?

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