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in Clovis, CA
Clovis investors usually face this choice: DSCR for rental holds or hard money for flips. Both skip W-2 income checks, but the timeline and cost structure differ completely.
DSCR works when the property already cash flows or will once rented. Hard money works when you need fast funding and plan to exit in under a year.
DSCR loans qualify based on rental income divided by monthly debt. You need a ratio above 1.0, meaning rent covers the mortgage plus taxes and insurance.
Rates run 1-2% higher than conventional loans. You can expect 20-25% down and closing in 3-4 weeks. Credit minimums sit at 620-640 depending on the lender.
Most DSCR lenders accept investment properties only. No owner-occupied homes. Single-family rentals in Old Town Clovis or newer builds near Copper River Ranch both work.
Hard money lenders fund based on the property's after-repair value. They lend 65-75% of ARV, which covers purchase and most renovation costs if you bring enough cash.
Rates range from 9-13% with 2-4 points at closing. Terms run 6-18 months. The goal is refinance or sell before maturity, not carry the loan long-term.
Approval happens in days, funding in 1-2 weeks. Credit matters less than the deal itself. I've closed hard money with scores in the 500s when equity was strong.
Timeline separates these loans more than anything. Hard money closes faster but costs 3-4x more in rate and fees. DSCR takes longer but you can hold it for decades.
DSCR requires the property produce income now or within 30 days of purchase. Hard money doesn't care if it's vacant or trashed. Exit strategy differs completely too.
Use DSCR when buying turnkey rentals or properties needing minor cosmetic updates. The Clovis rental market supports strong DSCR ratios if you buy at the right price.
Use hard money for heavy rehabs, foreclosures, or when you must close in under 2 weeks. Flip investors use hard money almost exclusively because DSCR won't fund vacant distressed properties.
Some investors use hard money to acquire and renovate, then refinance into DSCR once the property is rent-ready. That two-step approach works well in Fresno County where ARV spreads justify the cost.
No. DSCR requires rental income, which vacant flip properties don't generate. Hard money is the standard loan for flips.
Hard money closes in 1-2 weeks. DSCR takes 3-4 weeks minimum because lenders verify rent and review full appraisals.
No. Both allow individual or LLC borrowers. Some lenders prefer LLCs for asset protection but don't require them.
Yes. This is common. Complete the rehab, lease the property, then refinance into a 30-year DSCR loan.
DSCR requires 620-660 minimum. Hard money lenders accept 580-600 or lower if equity and exit strategy are strong.