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in Beverly Hills, CA
Beverly Hills investors face a choice: use conventional financing with strict income rules, or go with DSCR loans that qualify on rental cash flow. The right option depends on whether you're buying your first property or scaling a portfolio.
Conventional loans deliver lower rates but require personal income verification. DSCR loans ignore your W-2 and focus solely on whether the property pays for itself.
Conventional loans offer the best rates and terms for borrowers with clean tax returns and verifiable income. You'll need two years of W-2s or 1099s, plus reserves covering 6-12 months of payments.
These loans cap at 10 financed properties per borrower. That limit stops most serious investors, especially in markets where one property costs $2-4 million.
DSCR loans qualify you based on rental income divided by mortgage payment. Lenders want a ratio above 1.0, meaning rent covers the loan with room to spare.
No income verification means no tax return review and no employment letters. You can finance unlimited properties as long as each one generates adequate rental income.
The rate gap matters less than you'd think in Beverly Hills. A 1% higher rate on a $2 million loan costs $20,000 annually, but avoiding income documentation lets self-employed borrowers keep deductions intact.
Portfolio limits create the real divide. Conventional loans work for your first few rentals. DSCR becomes essential once you hit property number 10 or need financing without disrupting your tax strategy.
Use conventional for your first 1-3 investment properties if you have W-2 income and clean tax returns. The rate savings compound over 30 years.
Switch to DSCR when you've maxed conventional limits, write off significant income, or need faster closings without chasing employment letters. Most Beverly Hills investors with 5+ properties eventually make this shift.
Yes. Most investors use conventional for their first 10 properties, then switch to DSCR for additional acquisitions. The programs don't conflict.
Most DSCR lenders want 680+ credit. Conventional loans can go as low as 620 for investment properties with larger down payments.
DSCR often closes 5-7 days quicker since there's no employment verification. Conventional takes longer when underwriters request additional income docs.
Yes. Lenders order an appraisal with a rent schedule to determine market rent. You don't need an existing tenant in place.
Some lenders approve ratios as low as 0.75 with higher rates and larger down payments. Others won't finance properties with negative cash flow.