Question 1

Can I use a DSCR loan to buy a fixer-upper in Commerce?

Accepted Answer

No. DSCR loans require tenant-ready properties generating rental income now. Use hard money for properties needing significant repairs.

Question 2

Which loan has lower closing costs for Commerce properties?

Accepted Answer

DSCR loans cost less overall with standard fees. Hard money adds 2-4 points upfront, which can mean $8,000-$16,000 on a $400,000 loan.

Question 3

Do both loans work for Commerce commercial properties?

Accepted Answer

Yes, but with limits. DSCR loans typically cap at four units. Hard money funds commercial deals more flexibly based on asset value.

Question 4

Can I refinance from hard money to DSCR after renovations?

Accepted Answer

Absolutely. This is the standard strategy for Commerce fix-and-rent investors. Rehab with hard money, then refinance to DSCR once tenants are in place.

Question 5

Which loan is easier to qualify for with credit issues?

Accepted Answer

Hard money wins here. Most hard money lenders ignore credit scores entirely and focus on property value and your exit plan.

Question 6

How quickly can I close with each loan type in Commerce?

Accepted Answer

DSCR loans take 25-35 days. Hard money closes in 7-14 days, sometimes faster if you have a strong relationship with the lender.

DSCR Loans vs Hard Money Loans for Commerce Investment Properties: Which Financing Fits Your Deal?