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in Jackson, CA
Jackson's rental market draws investors looking to buy income properties without W-2 verification. Both DSCR and hard money loans skip traditional income docs, but they serve completely different purposes.
DSCR loans work for buy-and-hold investors who want long-term financing on performing rentals. Hard money suits fix-and-flip projects where speed matters more than rate.
DSCR loans qualify you based on rental income alone. The property needs to generate enough rent to cover the mortgage payment, typically 1.0x to 1.25x coverage.
You get 30-year fixed terms with rates 1-2% above conventional. No personal income verification, no tax returns, no employment letters. The deal stands on the property's performance.
Hard money loans fund in days, not weeks. Lenders look at the property's after-repair value and your experience, not credit scores or income.
Terms run 6-24 months with rates from 8-15%. You pay points upfront—typically 2-4 points. These loans get deals closed fast when speed beats cost.
Timeline separates these loans immediately. DSCR takes 21-30 days to close. Hard money closes in under a week when you need to move on a distressed property.
Cost structure differs drastically. DSCR gives you conventional-like rates for long holds. Hard money costs 3-4x more annually but you only carry it during renovation. DSCR requires the property to cash flow now. Hard money bets on future value after repairs.
Use DSCR when you're buying a property that already rents or needs minor cosmetic work. The property must produce rental income immediately to qualify. This works for Jackson's established rental homes.
Use hard money when you're buying a distressed property that can't qualify for traditional financing. You need speed to compete with cash buyers or the property needs major rehab before it's rentable. Plan your refinance exit before you close.
Yes, that's a common strategy. Fix the property with hard money, get it rented, then refinance to DSCR for long-term hold. Plan for 6 months of seasoning.
DSCR typically requires 20-25% down. Hard money asks for 25-35% down based on after-repair value. Neither offers high-leverage options.
No. Lenders use current market rent or an existing lease. They don't need your history as a landlord, just property cash flow proof.
Yes. Most hard money lenders care more about the deal than your credit score. Some don't even pull credit reports.
Hard money wins for properties needing major work. DSCR won't approve a property that can't rent immediately in current condition.