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in Reedley, CA
Reedley investors have two main paths when personal income won't qualify them. DSCR loans use rental income to approve long-term holds. Hard money uses property value for quick flips.
Both skip W-2s and tax returns. The difference is your timeline. DSCR works for rentals you'll keep. Hard money works for properties you'll fix and exit fast.
DSCR loans approve based on rental income divided by mortgage payment. You need a ratio above 1.0 in most cases. Rates run 1-2% higher than conventional but you get 30-year terms.
These work for turnkey rentals or light rehabs with tenant appeal. Expect 20-25% down and credit scores around 640 minimum. Closing takes 21-30 days with appraisal and title work.
Hard money lenders fund based on after-repair value, not current condition. They'll lend 65-75% of ARV for fix-and-flip projects. Rates hit 9-13% with points at closing.
Terms run 6-24 months because these are bridge loans, not permanent financing. Credit matters less than deal quality and exit strategy. Closings happen in 7-14 days with minimal paperwork.
DSCR costs less per month but requires tenant-ready properties. Hard money costs more but funds distressed deals banks won't touch. DSCR takes three weeks. Hard money takes ten days.
DSCR fits buy-and-hold investors building rental portfolios in Reedley's residential areas. Hard money fits flippers buying dated homes near downtown or properties needing major work before they'll appraise.
Choose DSCR if you're buying a property that's rent-ready or needs cosmetic updates only. Monthly payments matter because you're holding long-term. The rental income needs to cover debt service from day one.
Choose hard money if the property won't appraise in current condition or you're flipping within 12 months. Speed matters more than rate when you're competing with cash buyers or need to start rehab immediately.
Yes, that's a common strategy. Use hard money to buy and renovate, then refinance to DSCR once the property is rent-ready and appraised at full value.
Hard money closes in 7-14 days. DSCR takes 21-30 days because it requires full appraisal and title work like traditional mortgages.
Neither requires W-2s or tax returns. DSCR qualifies on rental income. Hard money qualifies on property value and your equity position.
DSCR typically requires 640+ credit. Hard money lenders accept lower scores, sometimes down to 600, because the property secures the loan.
No. DSCR requires an investment property generating rental income. Hard money is for investment properties only, typically fix-and-flip projects.