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DSCR vs. Fix and Flip Loans

Name: DSCR vs. Fix and Flip Loans
Uploaded: 2025-11-11T22:31:36+00:00
Duration: 1 min 9 s
Channel: Mundo Sanchez
Description: A brief conversational excerpt explaining that DSCR (Debt-Service Coverage Ratio) loans require properties to be turnkey and certified as livable by an…

11 Nov 2025 · 1 min

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1:09

A brief conversational excerpt explaining that DSCR (Debt-Service Coverage Ratio) loans require properties to be turnkey and certified as livable by an appraiser; properties needing visible or extensive rehab (not livable) must use a fix-and-flip loan initially, after which borrowers can refinance into a long-term DSCR loan once rehab is complete. The speaker gives an example mentioning roughly $30,000 of needed rehab can still be livable depending on the appraisal.

Chapters

If we find a property that's not ready, it's not turnkey and it needs some improvements, how would you add that?
Well, you wouldn't be able to get a DSCR loan because a DSCR loan is turnkey loan. You can't have any rehab on it. So when you get an appraiser appraisal, it has to state that it's, you know, certified livable condition. It can, you know, I've seen properties get appraised that it honest, honestly need like $30,000 worth of rehab work to be considered like what I would call an attractive listing or something that people would want to stay at. But it's still livable, right? So it all depends, you know, if it's ripped down to the studs, that's not livable. So it really comes down to the appraisal. If it's not a turnkey property and does require visible rehab that in its current condition is not livable, then you're looking at a fix and flip loan. You'll have to wait till you do the rehab and then refinance out of that fix and flip load into your long term DSCR loan.