Choose by your exit. Short-term private or hard money generally fits a property you'll renovate and sell, or one you need to bridge for now. A DSCR loan generally fits a rental you plan to hold. Many investors use both: private money to buy and fix, then a DSCR refinance once the property is rented.
I'm Reinier Cancio, a Miami loan officer. When an investor calls me, my first question isn't about rates. It's "What's the plan for this property?"
Hard money vs. private money
People use these terms interchangeably, and in everyday conversation, the difference is small. Both generally describe short-term, business-purpose loans from non-bank capital. Those loans focus on the property and your plan more than your tax returns. What matters is the actual terms and the capital source behind them, not the label.
Side by side
Private or hard money | DSCR | |
|---|---|---|
Best fit | Buy, renovate, sell, or bridge | Buy or refinance a rental and hold |
What gets reviewed | Property, scope of work, and exit | Rent compared with the full payment, plus credit, equity, and reserves |
Your role | Your plan and any project experience | Long-term owner of an income property |
Hold period | Short term | Long term |
Watch out for | No workable exit when the loan comes due | Prepayment penalty if you sell early |
Property use | Business purpose, non-owner-occupied | Investment property |
Three questions to answer first
Will you sell or keep it? This answer usually decides the loan.
Does the property need work? A property in rough shape may not be ready for long-term rental financing. A short-term loan can fund the plan until it is.
Would the rent cover the payment after the work? Run that number before you buy, using real insurance and tax figures, not the seller's. If you may refinance later, the math needs to work under the guidelines at that time.
The buy, fix, and hold play
Here's the sequence I talk through most often. It's a plan to review, not a guarantee, because a later refinance is its own underwriting decision.
Buy and renovate with short-term private financing.
Finish the work and place a tenant.
Refinance into a long-term DSCR loan, if the property and the numbers qualify.
The mistake is treating step three as automatic. Before you close on the first loan, look at the rent, the insurance, and the likely payment. If the property won't qualify later, you want to know that now.
What to send me
Estimates are fine to start. Send the property location, purchase price or estimated value, requested financing, renovation budget, after-repair value, existing debt, your recent project experience, and your exit plan.
Straight answers
Can I use private money on my primary residence?
This type of investor financing is for business-purpose, non-owner-occupied property. If you live there or plan to, different rules apply, so tell me up front.
How large a deal can you look at?
Bridge financing is available up to $20 million on residential and commercial investment deals, subject to the capital partner's underwriting.
How fast can it close?
Speed depends on the property, title, valuation, and how complete your package is. That's why I ask for the full plan up front.
Bring me the deal
Test a flip with my deal analyzer or a rental with my DSCR calculator. Then send me the scenario or call (305) 492-2404.
Reinier Cancio, NMLS #1615071, Loan Officer at Bold Mortgage (NMLS #386834), Miami, FL. Business-purpose investor scenarios. Program availability and terms vary. A scenario review is not a loan approval or commitment to lend. Equal Housing Lender.a
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