Question 1

Can I use DSCR loans for fix-and-flip projects in Orinda?

Accepted Answer

DSCR loans don't work for flips. They require rental income at closing, which you won't have on a property you plan to sell. Use hard money for flips, then DSCR for long-term rentals.

Question 2

What credit score do I need for each loan type?

Accepted Answer

DSCR lenders want 660-680 minimum for investor loans. Hard money cares less about credit, some approve scores in the 500s if the deal and equity make sense.

Question 3

How much down payment does each loan require?

Accepted Answer

DSCR loans need 20-25% down for rental properties. Hard money asks for 25-35% down or requires enough equity if you're refinancing an existing property.

Question 4

Can I refinance from hard money to DSCR later?

Accepted Answer

Yes, this is a common exit strategy. Complete your rehab, get tenants in place, then refinance to DSCR for a lower rate and longer term before the hard money balloon.

Question 5

Which loan works for buying rental properties at auction?

Accepted Answer

Hard money fits auction purchases that require all-cash closes in 7-14 days. DSCR loans take 3-4 weeks, too slow for most auction timelines in Contra Costa County.

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