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in Bell, CA
Bell's compact rental market demands different financing depending on whether you're buying a long-term hold or flipping a property fast. DSCR loans underwrite to rental income, while hard money lenders fund based on asset value and move at investor speed.
Most Bell investors I work with use DSCR for stabilized rentals that already cash flow. Hard money makes sense for distressed properties that need renovation before they can qualify for traditional financing.
DSCR loans qualify you based on rental income divided by the mortgage payment. You need a ratio above 1.0, meaning the property generates enough rent to cover its debt. Lenders don't verify your W-2 income, tax returns, or employment.
Terms run 30 years fixed with rates typically 1-2% above conventional. You can close in 2-3 weeks with 20-25% down on investment properties. These work for stabilized rentals that already have tenants or can rent immediately after purchase.
Hard money lenders fund based on the property's after-repair value, not your income or credit. They'll lend 65-75% of ARV, which covers purchase and renovation costs on most deals. Terms run 6-24 months with interest-only payments during construction.
Rates range from 9-14% with 2-4 points upfront. You can close in 5-10 days once the property appraises. These loans fit fix-and-flip projects, properties needing major repairs, or bridge financing until you can refinance into permanent debt.
DSCR loans cost less but require the property to already generate rental income. Hard money costs more but funds properties that can't qualify anywhere else yet. DSCR gives you 30 years to hold; hard money forces a sale or refinance within 12-24 months.
With DSCR, you need decent credit (640+) and the property must be rent-ready. Hard money cares less about credit and funds properties in rough condition. DSCR works for buy-and-hold investors. Hard money works for flippers and major renovations.
Use DSCR if you're buying a rental that already has tenants or can rent immediately without major work. The property needs to generate enough rent to cover the mortgage. You plan to hold it for years, not flip it in months.
Use hard money if the property needs substantial repairs before it can rent or sell. You're flipping it within 12 months or renovating to refinance into permanent financing. Speed matters more than rate, and you have a clear exit strategy with timeline.
Yes, if it's rent-ready and cash flows immediately. Lenders underwrite to current rental income, so the property must be habitable and leasable at closing.
DSCR typically requires 640+ credit. Hard money lenders care less about credit—some approve borrowers in the 500s if the deal math works and you have equity.
Yes, that's a common strategy. Fix the property with hard money, get tenants in place, then refinance to DSCR for long-term hold at lower rates.
DSCR has lower total costs. Hard money charges 2-4 points upfront plus higher rates, but you pay for speed and flexibility on distressed properties.
Yes, both work for 2-4 unit properties. DSCR underwrites to combined rental income. Hard money lends based on ARV regardless of unit count.