Exit Strategies for Ground-Up Builds: Holding, Selling, or DSCR-Refi—Which Pays in 2025?

You’ve poured the slab, framed the walls, and passed final inspection. Now what? 2025’s rate landscape, buyer demand, and rental fundamentals create three clear exits—each with wildly different profit curves.

1 | Snapshot of the 2025 Ground-Up Market

Metric (U.S. Average) Q2-2024 Q2-2025 Direction
30-yr Owner-Occupant Mortgage 6.95 % 7.25 % ⬆ +30 bp
30-yr DSCR Investment Loan 7.60 % 7.40 % ⬇ –20 bp
Median New-Home Price $421 K $438 K ⬆ 4 %
National Single-Family Rent YoY 3.2 % 4.1 % ⬆

Takeaway: Higher buyer rates temper retail demand, but investor debt costs edged lower and rents keep rising—making the hold-and-rent or rent-then-refi play more attractive than a straight sale in many metros.

2 | The Three Core Exit Paths

Exit Typical Timeline Cash Need at CO* 2025 Pros 2025 Cons
1. Retail Sale (Flip-Style) Close ⇒ List ⇒ 30-60-day escrow $0 • Quick liquidity
• No property-management headaches		 • Buyer pool shrinks at 7 %+ rates
• Agent commissions (3–5 %)
2. Hold & Rent (BRRRR-Lite) Lease in 30-45 days 6-month PITIA reserves • 4 % rent growth cushions DSCR
• Depreciation shelters cash flow		 • Ties up equity
• Landlord responsibility
3. Bridge-to-DSCR Refi 3-6 months lease-up ⇒ refi Interest reserve + reserve requirements • Lock 30-yr fixed at 80 % LTV
• Cash-out at new appraised value		 • Two sets of closing costs
• Need 1.15+ DSCR to qualify

*CO = Certificate of Occupancy.

3 | Deal Math—Which Pays? (2,000 sf Spec, Sun-Belt MSA)

Assumption Sell Rent & Hold Bridge-to-DSCR
All-In Cost $350 K $350 K $350 K
Sale Price / Appraised ARV $420 K — $420 K
Gross Rent / mo — $3,100 $3,100
Net Cash Flow / mo — $920 $920
Exit Debt — Bridge 11 % I/O Bridge 11 % ⇒ DSCR 7.4 %
Year-1 Net Profit / Equity Gain $55 K (flip profit) $11 K CF + $8 K principal = $19 K $18 K CF* + $60 K cash-out = $78 K
IRR (12 mo horizon) 18 % 13 % 26 %

*Bridge carry already reserved in loan; CF post-refi months 7-12.

Winner: In 2025’s rate mix, bridge-to-DSCR refi delivers the highest IRR—if you can manage two closings and hit DSCR ≥ 1.15.

4 | Stress-Test Your Decision

Shock Sale Path Rent Path Refi Path
Mortgage rates +50 bp –$12 K price No effect DSCR drops 0.04 (check floor)
Rent growth flat N/A –$1.8 K NOI –$1.8 K NOI (re-underwrite)
Days-on-Market +30 –$7 K carry + staging N/A N/A

A flat rental market hurts hold & refi the same, but a rate spike mostly hits retail pricing. Flip risk is rate-sensitive; DSCR risk is income-sensitive.

5 | Financing Playbook (LoanFunders.com)

Stage Product Key Terms
Build 90 % LTC Ground-Up 24-mo I/O, 48-hr draws
Hold Interest Reserve Optional P&I kicks in after refi
Exit Refi DSCR 30-yr Fixed 7.35–7.60 %, 80 % LTV, min DSCR 1.15

Brokers can white-label both the construction loan and the DSCR take-out—earning on each side while we handle underwriting.

6 | Decision Tree

  1. Need Cash Now?
    → List & Flip if DOM < 30 and buyer concessions are minimal.

  2. Comfortable Landlording?
    → Hold & Rent if DSCR ≥ 1.25 and you want depreciation.

  3. Equity & Cash-Out Goals?
    → Bridge-to-DSCR if you can season leases for 3–6 months and crave 30-yr fixed, non-recourse debt.

7 | Key Takeaways

  • In 2025, holding or refi outperforms a flip in most Sun-Belt and Midwest markets.

  • Bridge-to-DSCR wins on IRR but requires strict lease-up discipline.

  • Always model +50 bp rate shock and flat rent—choose the path with the least pain.

  • Fund build + exit with one lender partner to save weeks and duplicate docs.

Ready to Map Your Exit?

Send over your pro-forma and comps—LoanFunders.com will size both the ground-up loan and the DSCR refi, so you can pick the profit path with full clarity.

Build smart. Exit richer. Repeat.