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in Orland, CA
Orland investors have two main paths when personal income doesn't fit traditional lending. DSCR loans use rental income to qualify, while hard money lenders focus purely on property value.
Most Glenn County investors pick DSCR for buy-and-hold rentals. Hard money works better for fix-and-flip projects or fast acquisitions before refinancing.
DSCR loans qualify investors using rental income alone. Lenders calculate your debt service coverage ratio by dividing monthly rent by the mortgage payment. A ratio above 1.0 means the property pays for itself.
These are 30-year mortgages with rates typically 1-3% above conventional loans. You need 20-25% down and a 620+ credit score. No tax returns or W-2s required—just a lease agreement or rent schedule.
Orland investors use DSCR loans for single-family rentals and small multifamily properties. Closing takes 30-45 days, similar to conventional financing timelines.
Hard money loans ignore your income and credit entirely. Lenders care about one thing: property value and equity position. They'll lend 65-75% of current value or after-repair value depending on the deal.
Rates run 9-14% with 2-4 points due at closing. Terms last 6-24 months—these are bridge loans, not permanent financing. You pay interest-only monthly, then refinance or sell to exit.
Glenn County flippers use hard money to close in 5-10 days. That speed matters when competing for distressed properties or auction deals where cash buyers dominate.
Rate spread tells the story. DSCR loans run 7-9% for 30 years. Hard money hits 9-14% for 12 months. The monthly payment difference on a $300K loan exceeds $1,000.
Timeline splits these products cleanly. DSCR takes 30-45 days and requires appraisals, title work, and underwriting. Hard money closes in a week with minimal paperwork. Approval criteria diverge completely—DSCR needs rental income proof while hard money just wants solid collateral.
Exit strategy matters most. DSCR works when you're holding long-term and collecting rent. Hard money fits fix-and-flip projects or temporary gaps before permanent financing kicks in.
Pick DSCR when you're buying a rental property in decent condition with existing or projected tenants. The property needs to generate enough rent to cover the mortgage payment with a cushion. You have time for a normal closing and want a long-term hold strategy.
Choose hard money when speed trumps cost. This means distressed properties needing rehab, competitive bidding situations, or auction purchases. You need capital now and have a clear exit plan—either a sale after renovation or a DSCR refinance once the property is rent-ready.
Many Orland investors use both products in sequence. Start with hard money to acquire and renovate, then refinance into a DSCR loan once the property is stabilized and producing rental income.
Yes, this is standard practice. Complete your rehab, secure a tenant, then refinance into a DSCR loan within 6-12 months to lock lower long-term rates.
DSCR loans cost less upfront—standard closing costs apply. Hard money charges 2-4 points at closing, adding $6,000-$12,000 on a $300K loan.
DSCR lenders typically finance 2-4 unit properties easily. Hard money works for any property type but focuses more on single-family flip projects.
DSCR requires 620+ credit minimum. Hard money lenders rarely decline based on credit—scores below 600 still get approved if equity is strong.
Yes, but it makes little sense financially. If the property already produces income, DSCR offers better rates and terms for the same scenario.