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in Martinez, CA
Martinez investors face different scenarios that call for different financing. DSCR loans work when you're buying stable rentals for cash flow. Hard money fits fix-and-flip projects or properties needing major rehab before they can cash flow.
Both loans skip traditional income verification, but they solve different problems. DSCR qualifies you on rental income and offers long-term rates. Hard money qualifies you on the property's after-repair value and closes fast with short terms.
DSCR loans underwrite the property, not your tax returns. Lenders want a ratio above 1.0, meaning rent covers the mortgage payment. Rates run 1-2% higher than conventional, but you get 30-year terms and can build a rental portfolio.
Most Martinez rentals pencil at DSCR ratios between 1.1 and 1.3 if rents hold steady. You need 20-25% down and a 640+ credit score. No tax returns, no employment letters—just an appraisal and lease agreement or rent schedule.
Hard money lenders fund based on the property's current and after-repair value. They close in 7-14 days and don't care about your DTI or tax returns. Terms run 6-24 months with interest-only payments and rates between 9-14%.
This is bridge financing for properties that won't qualify for anything else yet. Distressed homes, major renovations, or deals you need to close before another buyer beats you. You pay for speed and flexibility with higher costs.
DSCR gives you permanence. Hard money gives you speed. A DSCR loan at 7.5% over 30 years builds equity while collecting rent. A hard money loan at 12% over 12 months gets you into a deal today, but you refinance or sell before the term ends.
Down payments differ too. DSCR wants 20-25% of purchase price. Hard money lends on ARV, so if you're buying a fixer at a discount, your effective down payment might be lower—sometimes just closing costs and rehab reserves.
Use DSCR when you're buying turnkey or light-fix rentals in Martinez. The property already generates rent or will after minimal work. You plan to hold it, collect cash flow, and refinance later if rates drop.
Use hard money when the property needs major rehab, sits vacant, or you're flipping it. Also use it when you need to close in under two weeks—Martinez deals move fast, and conventional lenders can't match that timeline. Just have your exit strategy locked before you sign.
Yes, that's a common exit strategy. Once renovations finish and the property generates rent, you refinance into a DSCR loan with lower rates and permanent financing.
DSCR loans typically cost less to close. Hard money lenders charge higher origination points—often 2-4 points—because they're taking more risk and moving faster.
Yes. DSCR uses standard appraisals. Hard money orders an as-is appraisal plus an after-repair value estimate to determine maximum loan amount.
No. Both are investment property loans only. DSCR requires rental income documentation, and hard money lenders focus exclusively on non-owner-occupied properties.
Hard money has looser credit requirements—some lenders go down to 580 FICO. But you need a solid exit plan and enough equity in the deal.