Investor Loan Comparison
Private Money vs Hard Money vs DSCR Loans
These are not interchangeable loan types. Each one fits a different stage of a real estate investment deal.
Source Summary
Private money is relationship-based capital. Hard money is short-term, asset-based bridge financing. DSCR is rental-property financing based on property income. Investors often use hard money or private money first, then refinance into DSCR after stabilization.
| Loan type | Plain-English definition | Best fit |
|---|---|---|
| Private money | Relationship-based capital from an individual or private source | Flexible local deals, repeat relationships, custom structures |
| Hard money | Short-term asset-based financing for acquisition or renovation | Fix and flip, BRRRR bridge, distressed or time-sensitive deals |
| DSCR loan | Rental-property financing based on property income | Stabilized rentals, portfolio growth, cash-out refinance, long-term holds |