Financing Strategy
Bridge to DSCR Explained
How investors use bridge loans for acquisition and renovation, then refinance into long-term DSCR loans for permanent financing.
What is Bridge to DSCR?
Bridge to DSCR is a two-phase financing strategy where investors use a short-term bridge loan to acquire and renovate a property, then refinance into a long-term DSCR loan once the property is stabilized and generating rental income.
The Two-Phase Strategy
1Phase 1: Bridge Loan
Use a bridge loan to quickly acquire and renovate the property. Bridge loans offer fast closings (7-14 days), higher LTVs, and funding for renovations. Terms are typically 12-24 months.
2Phase 2: DSCR Refinance
Once the property is renovated and rented, refinance into a long-term DSCR loan. Get a 30-year fixed rate, lower interest rate, and permanent financing based on the property's rental income.
Use the DSCR Calculator to estimate your qualification for the refinance phase.
Why This Strategy Works
- Fast acquisition with bridge loan speed
- Access to renovation capital
- Transition to stable long-term financing
- Lower permanent rate with DSCR loan
- No personal income verification on DSCR phase
- Build equity through renovation before refinance
Ideal Scenarios
This strategy works best for properties that need moderate to significant renovation work before they can be rented at market rates. It's perfect for investors who want to add value through improvements and then hold for long-term rental income.
Timeline Example
Month 1: Close on bridge loan, begin renovations
Months 2-4: Complete renovations
Month 5: Tenant move-in, stabilize income
Month 6-7: Apply for DSCR refinance
Month 8: Close on DSCR loan, exit bridge
Ready to Execute Your Bridge-to-DSCR Strategy?
Our team specializes in bridge-to-DSCR financing for real estate investors. Let us help you structure both phases of your deal for maximum efficiency.