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in Union City, CA
Union City investors have two powerful financing tools for rental properties and fix-and-flip projects. DSCR loans qualify you based on rental income, while hard money loans focus on the property's value.
Both loan types serve different purposes in Alameda County's competitive real estate market. Your choice depends on whether you're buying a cash-flowing rental or need fast funding for a renovation project.
DSCR loans qualify investors without verifying employment or tax returns. Lenders approve your loan based solely on the property's rental income compared to its mortgage payment.
These loans work well for Union City rental properties with stable tenants. You can finance single-family homes, condos, or small multi-family properties with terms up to 30 years.
Most DSCR lenders require at least 20% down and look for a debt service coverage ratio of 1.0 or higher. The property's rental income must cover the monthly mortgage payment to qualify.
Hard money loans provide fast funding based on your property's current or after-repair value. These short-term loans close in days rather than weeks, making them ideal for competitive situations.
Union City fix-and-flip investors use hard money to acquire properties quickly and fund renovations. Terms typically run 6 to 24 months with the expectation you'll refinance or sell.
Lenders focus on the property's potential value and your exit strategy. While rates are higher than traditional loans, the speed and flexibility often make hard money worthwhile for time-sensitive deals.
DSCR loans offer lower rates and longer terms but take 3-4 weeks to close. Hard money closes in 5-10 days but carries higher rates and shorter terms with the expectation of a quick exit.
DSCR requires properties to generate rental income that covers the mortgage. Hard money cares about property value and your renovation plan, making it suitable for vacant or distressed properties.
Down payments differ too. DSCR typically needs 20-25% down on the purchase price. Hard money may require 25-35% down but can include renovation costs in the loan amount.
Choose DSCR loans when you're buying a turnkey rental property in Union City that's already generating income or can rent immediately. These loans make sense for long-term holds with stable cash flow.
Pick hard money when you need to close fast on an Alameda County property that requires significant work. This option works best when you have a clear exit strategy through refinance or sale within 12-18 months.
Many successful investors use both tools. They might use hard money to acquire and renovate a Union City property, then refinance into a DSCR loan once it's rented and cash flowing.
Yes, many Union City investors qualify for both since they have different approval criteria. DSCR evaluates rental income while hard money focuses on property value and your investment experience.
DSCR loans typically offer lower rates because they're longer-term financing. Hard money rates are higher due to the short-term nature and faster closing speed. Rates vary by borrower profile and market conditions.
Hard money loans can close in 5-10 days for time-sensitive deals. DSCR loans take 3-4 weeks to close, similar to conventional mortgages but without income verification requirements.
DSCR loans don't require investing experience since approval is based on property income. Hard money lenders often prefer borrowers with at least one successful project but may work with first-time flippers with strong plans.
No, both DSCR and hard money loans are strictly for investment properties. You'll need a conventional or government-backed loan for a primary residence purchase in Union City.