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in Firebaugh, CA
Firebaugh investors have two paths to finance rental property. DSCR loans work for long-term holds with steady rental income. Hard money loans work for flips and projects that need fast funding.
Both skip W-2 income verification, which helps self-employed buyers and multi-property investors. The right choice depends on your timeline and whether you're holding or selling the property.
DSCR loans qualify you based on rent, not paystubs. Lenders want a debt service coverage ratio above 1.0, meaning rent covers the mortgage payment. Most Firebaugh rentals need rental income at least equal to monthly debt.
Terms run 30 years fixed with rates typically 1-2% above conventional loans. You can finance single-family homes, duplexes, or small multifamily properties. Expect 20-25% down and no income tax returns required.
Hard money loans fund in days, not weeks. Lenders base approval on the property's after-repair value, not current condition. This works for distressed Firebaugh properties that won't qualify for traditional financing.
Terms last 6-24 months with rates between 8-15%. You pay points upfront, usually 2-5% of the loan amount. These are bridge loans for renovation projects or properties you plan to refinance once stabilized.
DSCR loans cost less but take longer to close. Hard money costs more but funds immediately. DSCR rates run 7-9% with 30-year terms. Hard money rates hit 10-15% with terms under two years.
DSCR lenders want rent rolls and leases proving income. Hard money lenders want a clear exit strategy and property equity. DSCR works when you have tenants or market rents. Hard money works when the property needs repairs before it can produce income.
Choose DSCR if you're buying turnkey rentals or properties with tenants in place. The lower rates and long terms make monthly cash flow work. Choose hard money if you're renovating, flipping, or need to close in under two weeks.
Most Firebaugh investors use hard money to acquire and renovate, then refinance into DSCR once the property is rent-ready. This two-step approach gets you speed upfront and lower costs long-term. Planning the exit before you fund matters with hard money since those terms don't last.
DSCR lenders want properties in rentable condition. Minor repairs work, but major renovations require hard money first, then refinance to DSCR once stabilized.
DSCR loans typically require 660+ credit. Hard money lenders care more about equity and exit strategy, often approving scores as low as 600.
Most hard money lenders fund in 5-10 days. Some can close in 3 days if the deal is straightforward and appraisal turns quickly.
DSCR loans allow personal or LLC ownership. Hard money lenders are flexible with entity structure since they focus on the asset and exit plan.
Yes, this is common. Once renovations are done and the property is rented, refinance into DSCR for lower rates and long-term financing.