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Loan comparison

DSCR vs Fix & Flip Loans

A Fix & Flip loan is short-term money to buy and renovate a property; a DSCR loan is long-term financing for a rental that qualifies on the property's income — not your paycheck.

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Side-by-side

General comparison only — terms vary by deal. Call for current terms.

Purpose

DSCR LoanBuy or refinance a rental property you plan to hold for the long run.

Fix & Flip LoanBuy a property, renovate it, then sell it or refinance it.

Loan Term

DSCR LoanLong-term, similar in length to a traditional mortgage.

Fix & Flip LoanShort-term — measured in months, not years.

Payment Structure

DSCR LoanRegular monthly payments, typically amortizing, with fixed or adjustable options.

Fix & Flip LoanCommonly interest-only during the project, with the balance paid off at sale or refinance.

Rehab Funding

DSCR LoanGenerally not included — the property should already be in rentable shape.

Fix & Flip LoanOften built in, with renovation funds released in draws as work is completed.

Property Condition

DSCR LoanRent-ready or already leased.

Fix & Flip LoanDistressed, dated, or in need of significant work.

How You Qualify

DSCR LoanMainly on the property's rental income versus its monthly payment. Personal income documents usually aren't required.

Fix & Flip LoanMainly on the deal — purchase price, scope of work, and after-repair value — along with your experience and plan.

Speed to Close

DSCR LoanA steady, well-documented process built around the property's income and appraisal.

Fix & Flip LoanBuilt for speed so you can compete for time-sensitive and off-market deals.

Exit Strategy

DSCR LoanNone required — hold, collect rent, and sell or refinance on your own timeline.

Fix & Flip LoanPlanned upfront: sell the finished property or refinance into long-term financing, often a DSCR loan.

Choose a DSCR Loan if…

  • The property is ready to rent or already has a tenant
  • You'd rather qualify on rental income than on tax returns
  • You're building a long-term rental portfolio
  • You want to close in an LLC or other business entity
  • You want predictable monthly payments for the long haul
Learn about DSCR Loans →

Choose a Fix & Flip Loan if…

  • The property needs real work before it can sell or rent
  • You want renovation costs financed alongside the purchase
  • You plan to sell or refinance once the rehab is done
  • Closing quickly is what wins you the deal
  • You have a clear scope of work and exit plan
Learn about Fix & Flip Loans →

How investors use both: the BRRRR method

You don't always have to pick one. Many investors start a property on a Fix & Flip loan, then refinance into a DSCR loan once it's renovated and rented — pulling capital back out to do it again.

  1. 1

    Buy

    Acquire a property below its potential value.

    Fix & Flip Loan
  2. 2

    Rehab

    Renovate using draw-based rehab funds.

    Fix & Flip Loan
  3. 3

    Rent

    Place a qualified tenant and stabilize income.

  4. 4

    Refinance

    Pay off the short-term loan with long-term DSCR financing.

    DSCR Loan
  5. 5

    Repeat

    Put recovered capital toward the next deal.

Frequently asked questions

What does DSCR mean?

DSCR stands for Debt Service Coverage Ratio. It compares a property's rental income to its monthly debt payment — principal, interest, taxes, insurance, and any HOA dues. Because the loan is qualified on the property's cash flow, you typically don't need to show personal income.

Can I use a DSCR loan on a property that needs repairs?

DSCR loans are designed for properties that are ready to rent. If a property needs substantial work, a Fix & Flip loan is usually the better starting point — then you can refinance into a DSCR loan once it's renovated and leased.

Do I need experience to get a Fix & Flip loan?

Experience helps and can affect your terms, but newer investors can still qualify with a solid deal, a realistic budget, and a clear plan. Call us and we'll talk through where you stand.

Can I close either loan in an LLC?

Yes. Both are business-purpose loans for investment properties, and closing in an LLC or other entity is common.

How do I move from a Fix & Flip loan into a DSCR loan?

Once the rehab is finished and a tenant is in place, you apply for a DSCR loan based on the property's updated value and rent. The new loan pays off the short-term Fix & Flip loan. It's smoothest when the refinance is planned from day one.

Does Moon Walk Fundings offer both?

Yes — Fix & Flip for the rehab, DSCR for the hold. You work with one lender and one point of contact from purchase to refinance. Call Janson directly to talk through your deal.

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Not sure which loan fits? Let's talk it through.

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