Bridge, Fix & Flip, Construction or DSCR: Picking the Right Loan

A bridge loan is a short-term loan on a property that needs time rather than a major rebuild. It's one type of what people call hard money. Choose it when you need to close quickly or hold briefly before a sale or long-term loan. Choose a Fix & Flip, New Construction or debt service coverage ratio (DSCR) loan when the project calls for one.

"Hard money" loosely describes short-term, property-backed loans from private lenders. Bridge loans, flip loans and construction loans all fall under it. The real question isn't bridge versus hard money. It's which structure fits what you're doing with the property.

Bridge vs. Fix & Flip

Both are short-term. The difference is the renovation.

• Fix & Flip includes a rehab budget, typically held back and paid out in stages as the work gets done. Built for meaningful renovation and resale.
• Bridge funds the purchase or refinance with little or no construction money. Built for properties that are usable now or need only light work.

If you're replacing systems and moving walls, it's probably a flip loan. If you're painting and leasing, a bridge may fit.

Bridge vs. New Construction

New Construction loans fund building from the ground up, usually with draws tied to stages like foundation, framing and finishes. Some lenders will make a short-term loan to buy or hold a lot, but a bridge loan isn't designed to fund the build itself.

Bridge vs. DSCR

A DSCR loan is long-term, often 30 years, and qualifies mainly on whether the property's rent covers its debt payment. It's for stabilized rentals.

A bridge loan doesn't require existing rent. It's often used to get a property to the point where it qualifies for DSCR.

Quick guide

Using two in sequence

Example: You buy a vacant single-family home that needs carpet and paint. A bridge loan closes the purchase quickly. Over three months you refresh it and sign a lease. Then you refinance into a DSCR loan and pay off the bridge.

RSC Private Lending offers all four programs: Bridge, Fix & Flip, New Construction and DSCR Rental. In a sequence like this one, the DSCR refinance is a separate loan with its own underwriting.

What this means for you

Start with the property and the plan, not the loan name. How much work does it need, how long will you hold and how will you exit? The answers point you to the right loan, or the right two loans in a row.

Not sure which loan fits your deal? Send your scenario to RSC Private Lending for a term sheet in 24 hours. Subject to underwriting.