Quick answer: hard money is for acquisition + rehab on a 6–18 month timeline. DSCR loans are for long-term hold on stabilized rentals where the property’s cash flow covers the mortgage. They aren’t competitors, they’re sequential. Most of our Central Arkansas BRRRR deals use hard money to buy and rehab, then refinance into a DSCR loan to hold long-term.
From inside a 150+ door operation and dozens of integrated construction projects across Little Rock, North Little Rock, Sherwood, Jacksonville, Conway, Cabot, Benton, and Bryant, here’s the operator view.
Hard Money: What It Actually Is
Short-term, asset-based financing. Typical Central Arkansas terms in 2026:
- Rate: 10%–13% interest
- Points: 2–4 at close
- LTV: 70%–85% of purchase + 100% of rehab budget, capped at 70%–75% ARV
- Term: 6–18 months
- Underwriting: Property-driven, not borrower-driven. Close in 7–14 days
Used for: distressed acquisition, value-add rehab, build-to-rent construction, bridge between contracts and stabilized refinance.
DSCR Loans: What They Actually Are
Debt Service Coverage Ratio loans qualify the borrower based on the property’s rental income vs. mortgage payment. No personal DTI, no W-2 verification, no tax returns in most cases.
- Rate: 7.5%–9.5% (varies with DSCR and FICO)
- Points: 1–3
- LTV: 75%–80%, sometimes 85% with strong DSCR
- Term: 30-year fixed or 5/1, 7/1, 10/1 ARM
- DSCR minimum: 1.0 to 1.25 (gross rents ÷ PITI)
- Underwriting: Property + borrower credit. Close in 21–35 days
Used for: long-term rental hold, BRRRR refi, portfolio scaling, out-of-state investor acquisition.
Side-by-Side
| Hard Money | DSCR | |
|---|---|---|
| Rate | 10%–13% | 7.5%–9.5% |
| Points | 2–4 | 1–3 |
| Term | 6–18 months | 30 years |
| Close speed | 7–14 days | 21–35 days |
| Best for | Buy + rehab | Hold |
| Personal income docs | No | No |
| Property condition | Distressed OK | Rent-ready required |
The BRRRR Stack: How They Work Together
Buy → Rehab → Rent → Refinance → Repeat.
Example from our portfolio: Little Rock SFR, $135,000 purchase + $35,000 rehab via hard money (75% LTV + rehab). After-repair value $215,000, stabilized rent $1,675. Refinanced into DSCR loan at 75% LTV ($161,250), pulled out original capital, kept the property, locked in 30-year financing. Total time hard-money-to-DSCR: 4.5 months.
What Tanks a DSCR Refi
- Rent below market, pull a real rental comp report before closing
- Property still has condition issues from rehab
- Insurance not in place
- No 6 months of seasoning (some lenders require it; some don’t)
- DSCR below 1.0 because property taxes or insurance got reassessed up
Operator Tips From 150+ Doors
- Don’t take more hard money points than you need. 3 points on $200,000 is $6,000. That’s real money on a thin-margin deal.
- Always model the refi exit first. If DSCR won’t pencil at the projected rent and rate, the deal doesn’t work.
- Local hard money lenders close faster on Central Arkansas deals. National lenders often want appraisals from out-of-state shops that delay close 7–10 days.
- DSCR rate moves with FICO. 760+ gets you the best pricing. 680 still works but expect 50–100 bps higher.
- Get the rate lock at offer, not at close. 30–45 days is plenty for DSCR.
FAQ
Can I get a DSCR loan on a property I haven’t bought yet?
Yes. DSCR loans work for both refinance and purchase. The property’s projected rent based on market comps qualifies the deal.
What DSCR ratio do lenders require?
1.0 minimum for most products; 1.20–1.25 for best pricing.
Is hard money worth it on a buy-and-hold rental?
Only as a bridge. Long-term hold with hard money is a profit killer at 10%+ interest. Refinance into DSCR or conventional as soon as the property stabilizes.
Do DSCR loans show up on my personal credit report?
Most don’t, since they’re underwritten to the LLC or property. Confirm with your lender, varies by product.
How fast can I refinance hard money into DSCR?
Some lenders allow refi at 0 days of seasoning if the property is leased; many require 3–6 months. Build that timeline into the original hard money note.
Want a property manager who understands BRRRR exits and can lease a rehabbed rental within 10 days of CO? Call Chase at 501-650-5137 or read our 10-day rental turn playbook.
About the Operator
Chase Calhoun is the founder and principal of Chase Calhoun Real Estate, LLC, a vertically integrated Central Arkansas real estate, property management, construction, and investment company. The portfolio operates against documented benchmarks: 95%+ occupancy, sub-30 day vacant, sub-10 day turns across 150+ units. Reach Chase directly at 501-650-5137. Full bio · Operator profile · Operator results.
Markets we serve: Little Rock · North Little Rock · Sherwood · Conway · Benton · Bryant · Maumelle · Cabot · All Locations
Operator services: Property Management · Build-to-Rent · Real Estate Sales · Cash Offers · All Services
Want help running the numbers on your next Arkansas deal?
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