Matching Loan Type to Exit Strategy

[Kelly Schroeder]

One mistake I see often is using long-term debt for short-term plans (or vice versa). Bridge, DSCR, and refi all serve different purposes depending on timeline. Curious how others decide which tool fits each deal.

[Andrew Lee]

Hi Kelly,

On my end, it's tough to give a one size fits all answer. An example, I am currently working with a client who's current hard money loan term is about to come due. With their credit, it does not meet my direct lending criteria for a DSCR. However, I was able to find a three year bridge loan; that will give the client time to improve their credit and ultimately refinance that into a lower rate DSCR.