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in Lakeport, CA
Lakeport's rental market attracts fix-and-flip investors and long-term rental buyers alike. Both groups need fast capital, but DSCR loans and hard money serve completely different strategies.
DSCR loans work for rental properties that cash flow from day one. Hard money works when you need to close in days or renovate a distressed property that won't qualify anywhere else.
DSCR loans qualify you based on the rental income your Lake County property generates, not your W-2 or tax returns. If the monthly rent covers the mortgage payment by at least 1.0x, you can get approved even with a recent job change or high personal debt.
Rates run 7.5% to 9.5%, and you can hold these loans for 30 years. They work best when you're buying a turnkey rental or a property that needs only cosmetic updates before it can generate rent.
Hard money loans are backed by the property's value, not your income or the rent it generates. Lenders fund based on your equity and the after-repair value if you're doing a rehab project in Lakeport.
Rates run 10% to 14%, with points upfront. Terms last 6 to 24 months, so you need a clear exit plan: sell, refinance into a DSCR loan, or refinance into conventional financing once renovations are done.
DSCR loans require the property to generate rental income that covers the debt. Hard money doesn't care about rent at all—only equity and exit strategy matter.
DSCR loans take 2 to 3 weeks to close and offer 30-year terms. Hard money closes in days but demands repayment or refinance within 2 years. DSCR rates are lower, but hard money accepts properties that need major work.
Use DSCR loans if you're buying a rental property in Lakeport that's already generating or will soon generate enough rent to cover the mortgage. This works for turnkey homes, small multifamily properties, or light fixers that tenants can move into quickly.
Use hard money if you're flipping a property, doing a major renovation, or buying a distressed home that no other lender will touch. You need speed and don't mind paying higher rates for 12 to 18 months while you execute your plan.
Only if repairs are minor and the property can generate rent within 60 days. Major rehabs won't qualify because the property can't produce income during construction.
Most lenders want you to have 20% to 30% equity in the property. They'll lend 70% to 80% of the purchase price or after-repair value, whichever is lower.
DSCR loans have lower rates, typically 7.5% to 9.5%. Hard money runs 10% to 14% because it's short-term and higher-risk for lenders.
Yes, once renovations are done and the property generates rental income. Most investors use hard money for the rehab phase, then refinance into a DSCR loan to hold long-term.
Yes, you need a full appraisal and a rent schedule showing the property's rental income. Hard money also requires an appraisal, but approval depends more on your equity position.