Question 1

Can I use DSCR for a fix-and-flip in Clayton?

Accepted Answer

Not really. DSCR requires the property generate rental income at closing. Hard money fits flip projects better since it funds based on after-repair value, not current rent.

Question 2

What down payment do I need for each loan type?

Accepted Answer

DSCR typically requires 20-25% down. Hard money varies but expect to bring 10-30% of purchase price, depending on the deal and your experience level.

Question 3

Do both loan types require income verification?

Accepted Answer

No. DSCR qualifies on property income, not yours. Hard money barely looks at income at all—it's asset-based lending focused on the property's value and potential.

Question 4

How quickly can I close with each option?

Accepted Answer

Hard money closes in 7-14 days with minimal paperwork. DSCR takes 21-30 days since lenders need appraisals, rent comps, and more thorough property review.

Question 5

Can I refinance hard money into DSCR later?

Accepted Answer

Yes, that's common. Use hard money to acquire and renovate, then refinance to DSCR once the property's rented. Just plan for two sets of closing costs.

DSCR vs Hard Money Loans in Clayton: Which Investor Loan Fits Your Deal?