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in Artesia, CA
Artesia investors typically choose between DSCR and hard money loans based on timeline and property condition. DSCR works for stabilized rentals generating income today.
Hard money fits fix-and-flip deals or properties needing major rehab. Your strategy determines which loan type gets you to closing faster.
DSCR loans qualify you based on the property's rental income, not your W-2 or tax returns. You need a debt service coverage ratio of at least 1.0, meaning rent covers the mortgage payment.
These are 30-year fixed loans with rates typically 1-2% above conventional mortgages. Expect 20-25% down and a 620+ credit score minimum.
DSCR loans close in 3-4 weeks and work for buy-and-hold investors building rental portfolios. You keep the property long-term and use rental income to service the debt.
Hard money loans fund based on the property's after-repair value, not your income or credit score. Lenders care about the deal's profit potential and your exit strategy.
Terms run 6-24 months with rates between 9-14% and 2-4 points upfront. You put down 10-20% and get funding in 7-14 days.
These loans fit flips, heavy rehabs, or bridge financing when you need fast capital. You refinance or sell before the term ends to avoid balloon payments.
DSCR loans have lower rates and longer terms but require existing rental income and take longer to close. Hard money costs more but funds distressed properties fast with minimal underwriting.
DSCR needs the property generating rent at closing. Hard money funds vacant or uninhabitable properties based on future value after repairs.
Your credit matters more for DSCR. Hard money lenders focus on the asset and your experience completing similar projects successfully.
Choose DSCR if you're buying a rental property in good condition that's already leased or market-ready. The lower rate saves thousands over 30 years on Artesia investment properties.
Pick hard money when you're buying a distressed property, flipping, or need capital in under two weeks. The higher cost is temporary if you execute the rehab and exit on schedule.
Many Artesia investors use both: hard money for acquisition and renovation, then refinance into a DSCR loan once the property generates rental income. This strategy maximizes speed and minimizes long-term costs.
Yes, if it's habitable and can generate rent at closing. Lenders require an appraisal showing the property is rentable in current condition.
You face a balloon payment for the full balance. Most lenders offer extensions at additional cost if you show progress on the project.
No direct experience required. They care about the property's rental income covering the debt, not your landlord resume.
Yes, most hard money lenders accept credit scores below 600. They focus on the property's value and your equity position.
DSCR loans work well for stabilized multi-family buildings generating income. Hard money fits value-add deals needing significant renovation work.