Investors Using DSCR or Hard Money Loans: How Do You Plan for Rate Fluctuations?

Question

With rates moving the way they have, I’m curious how other investors are structuring their deals to stay protected:

• For DSCR loans, are you leaning more toward fixed rates for predictability, or do you ride out ARMs for flexibility?
• For fix-and-flip projects, how do you factor potential rate hikes or dips into your profit margins?
• Have you changed your preferred hold period or exit strategy based on today’s market?

Would love to hear how others are navigating these financing challenges. Are you adjusting expectations, or do you build in a bigger cushion on every deal?

Looking forward to your insights!

Chris Seveney · Answer

Fore DSER we always talk to our borrowers upfront to let them know they need to get us documents ASAP so we can lock in the rate. Most people on DSCR go fixed because it is not much of a difference with an arm. Regarding fixi and flip, fix and flip rates traditionally do not fluctuate but on the back end, of course who knows what Rates will be in a 12 month period from now.

every borrower should be asking if the rate is locked or when it can get locked

Investors Using DSCR or Hard Money Loans: How Do You Plan for Rate Fluctuations?

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