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in Arcata, CA
Arcata attracts real estate investors for good reason. Humboldt State drives consistent rental demand near campus.
Two loan types dominate investor deals here: DSCR and hard money. They solve different problems — knowing which fits your deal matters.
DSCR loans qualify you based on the rental property's income — not your W-2 or tax returns. The property pays for itself on paper.
Lenders look at the Debt Service Coverage Ratio. A ratio above 1.0 means rent covers the mortgage. Most lenders want 1.1 or higher.
Hard money lenders care about the asset, not you. They lend based on the property's value — current or after renovation.
Terms are short, often 12 to 24 months. Rates run higher than conventional. The speed and flexibility are what investors pay for.
DSCR loans are built for buy-and-hold investors who want stable, long-term financing. Hard money is a short-term tool for fast moves.
Hard money rates run significantly higher. DSCR rates are elevated vs. conventional but far more sustainable over a full loan term.
Buying a student rental near HSU and holding it? DSCR is your loan. The rent covers the payment and the math works.
Found a distressed property needing a full rehab? Hard money gets you in fast. Refinance into DSCR once it's stabilized and rented.
DSCR lenders want stabilized properties with existing or projected rent. A property needing major rehab usually won't qualify until it's rent-ready.
Hard money can close in days once the lender values the asset. Speed depends on title, appraisal, and how organized your file is.
Most DSCR lenders want a 620 or higher. Some will go lower with stronger equity. Credit still matters — it just doesn't drive everything.
Most run 12 to 24 months. They're not meant to be held — the exit strategy, refinance or sale, is part of the deal from day one.
Yes — this is a common strategy. Get in with hard money, stabilize the property, then refinance into DSCR for long-term cash flow.
DSCR fits well when the unit is occupied and rents are documented. Lenders count projected rents too, which helps near-campus properties qualify.