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in Calabasas, CA
Calabasas investors often face a choice between DSCR and hard money financing. Both skip tax returns and W-2s, but they serve different purposes and timelines.
DSCR loans work for rental holds with stable income. Hard money fits fast acquisitions and heavy rehabs. Picking wrong costs you thousands in rate differential or forces an early refinance.
DSCR loans qualify you on rental income alone. Lenders calculate your debt service coverage ratio—monthly rent divided by monthly mortgage payment. A ratio above 1.0 means the property pays for itself.
You get 30-year fixed terms and rates closer to conventional mortgages. Most investors need 20-25% down. No tax returns, no employment verification, no debt-to-income calculations.
These loans close in 3-4 weeks. They work for established rentals or properties you plan to hold long-term. You can buy multiple properties without hitting Fannie Mae's 10-loan cap.
Hard money loans fund fast—often in 7-10 days. Lenders care about the property value and your exit strategy, not your credit score or rental projections. They'll lend on distressed properties that banks reject.
You pay 9-14% interest with 2-4 points upfront. Terms run 6-24 months. Most lenders cap LTV at 65-75% of after-repair value, so you need more cash at closing.
These loans fit fix-and-flip projects or bridge financing until you stabilize a property. You're paying for speed and flexibility, not long-term affordability.
Local decision guide
Use this comparison to weigh DSCR Loans and Hard Money Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Calabasas.
Calabasas investors often face a choice between DSCR and hard money financing. Both skip tax returns and W-2s, but they serve different purposes and timelines.
DSCR loans work for rental holds with stable income. Hard money fits fast acquisitions and heavy rehabs. Picking wrong costs you thousands in rate differential or forces an early refinance.
DSCR loans qualify you on rental income alone. Lenders calculate your debt service coverage ratio—monthly rent divided by monthly mortgage payment. A ratio above 1.0 means the property pays for itself.
Rate difference matters most. DSCR loans run 7-9% currently. Hard money costs 10-14% plus points. On a $1M loan, that's $2,500-5,800 more per month in interest alone.
Timeline splits them too. DSCR takes 3-4 weeks and requires an appraisal, title work, full underwriting. Hard money closes in a week with minimal paperwork but forces a refinance or sale within 12-24 months.
Qualification criteria diverge completely. DSCR lenders want 1.0+ DSCR and 620+ credit. Hard money cares about asset value and your track record. They'll lend at 550 credit if the deal works.
Choose DSCR if you're buying a turnkey rental or light-rehab property you'll hold 3+ years. The lower rate saves you tens of thousands over time. You need patience for the 3-4 week close and a property that cash flows immediately.
Pick hard money when speed matters more than cost. You're buying at auction, beating other offers, or funding a 4-month flip. Properties needing heavy work won't qualify for DSCR until repairs finish.
Many Calabasas investors use both. Hard money funds the acquisition and rehab. DSCR refinances you out once the property rents and appraises at stabilized value. This combo captures speed and long-term rates.
Most lenders require 6-12 months of seasoning after a hard money purchase. You need rental history and a completed appraisal showing stabilized value before DSCR underwriting approves.
DSCR loans carry standard 2-3% closing costs. Hard money adds 2-4 points upfront, making it 4-7% total to close—significantly more expensive at origination.
Yes. DSCR goes up to 8 units easily. Hard money typically caps at 4 units unless you're working with a commercial hard money lender.
Possible but harder. Most hard money lenders want at least one completed project or require a higher down payment and lower LTV for first-timers.
DSCR lenders typically require 620+ credit. Hard money lenders go as low as 550 if the deal has strong equity and a clear exit strategy.