These three types of real estate investor loans serve different financing needs, timelines, and borrower profiles:

DSCR Loans (Debt Service Coverage Ratio)

• Purpose: Primarily for rental property investments.

• Approval: Based on property’s income, not personal income or tax returns.

• Example: An investor buys a $300K rental home, generating $2,500 in monthly rent. If the loan payment is $1,800, the DSCR is 1.39 (2500 ÷ 1800), showing strong cash flow and qualifying for financing.

• Best for: Investors with multiple properties or limited personal income documentation.
  
  

Hard Money Loans

• Purpose: Short-term financing for various real estate needs, often used when traditional lending is not an option.

• Approval: Based on the property’s value (asset-based), not credit or income.

• Example: An investor buys a distressed duplex for $200K and secures a hard money loan for 70% of the after-repair value (ARV), which is $350K. The lender gives $245K—enough to purchase and rehab.

• Best for: Quick closings, distressed properties, or borrowers with lower credit.
  
  

Fix-N-Flip Loans

• Purpose: Short-term loans used to buy, renovate, and sell properties quickly.

• Approval: Based on ARV and renovation plans.

• Example: A flipper finds a fixer-upper listed at $150K with a projected ARV of $280K. A lender provides $180K—covering purchase and rehab—with a 12-month term.

• Best for: Experienced flippers seeking high-turnaround deals and fast funding.
  
  

Key Differences:

• DSCR focuses on cash flow and is for buy-and-hold investors.

• Hard Money is for quick deals with flexibility, regardless of the exit strategy.

• Fix-N-Flip is designed specifically for resale-focused renovations with short timelines.

DSCR loans allow investors to qualify for funding based on a property's rental income rather than personal income. Lenders calculate the DSCR by dividing gross rental income by total debt obligations. A DSCR above 1.0 typically qualifies, meaning the property earns more than it costs to finance. This is ideal for investors scaling rental portfolios without tax return documentation.

Ideal candidates are real estate investors who buy undervalued properties, renovate them, and sell for profit. These borrowers often have construction experience, a solid exit strategy, and detailed renovation budgets. Quick access to capital and short repayment terms make this loan best for experienced flippers.

Hard money loans can finance residential, multifamily, mixed-use, and commercial properties. Lenders focus on asset value, not borrower credit. Properties that are distressed, need renovation, or are non-owner-occupied are often approved. These loans close faster than bank loans and are flexible for unconventional real estate scenarios.

Churches can access financing for buying, building, or renovating worship facilities. Lenders evaluate congregation size, donation history, financial statements, and leadership stability. Terms are flexible, and down payments are often lower. Loan programs support construction, land acquisition, or refinancing of existing debt.

Commercial real estate loans allow businesses to purchase income-generating properties like office buildings, retail centers, or warehouses. Benefits include property appreciation, rental income, tax advantages, and equity building. These loans often offer long terms and competitive rates with fixed or adjustable structures.