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in Duarte, CA
Duarte investors looking at rental properties or fix-and-flip deals face a choice between two non-QM financing paths. DSCR loans work for long-term rental holds, while hard money fits quick renovations and resales.
Both skip traditional income verification, but they're built for completely different investment timelines. Choosing wrong costs you thousands in interest or kills your deal structure before you close.
DSCR loans qualify you based on rental income divided by monthly mortgage payment. If that ratio hits 1.0 or higher, most lenders approve regardless of your tax returns or pay stubs.
These are 30-year mortgages with rates 1-2% above conventional loans. You need 20-25% down and decent credit, usually 640 minimum, but your business losses don't tank the application.
Duarte's multifamily and small rental market makes DSCR loans practical for investors buying and holding properties long-term. The property pays for itself from day one if the numbers work.
Hard money loans fund in days, not weeks, because approval hinges on property value and your exit strategy. Lenders care about the after-repair value and whether you can flip or refinance within 12 months.
Rates run 8-12% with 2-4 points upfront, and terms max out at 12-24 months. You'll put down 10-30% depending on experience and deal strength, but credit matters less than your track record.
These loans work for Duarte fix-and-flip projects or bridge financing when you need fast cash to close before conventional financing catches up. You're paying for speed and flexibility, not long-term affordability.
DSCR loans cost less per month but take 30-45 days to close with full appraisals and title work. Hard money closes in a week but doubles your interest rate and adds points that eat equity.
Your timeline decides everything. Holding a Duarte rental for five years on hard money terms would bankrupt most investors, while DSCR loans can't close fast enough to win competitive flip opportunities.
Credit and experience requirements flip between them. DSCR lenders want 640+ scores and proven rental income, while hard money cares more about your renovation budget and comparable sales data.
Choose DSCR if you're buying a Duarte rental property to hold and cash flow. The lower rate matters over 30 years, and rental income from day one makes the 1.0 ratio achievable on stabilized properties.
Pick hard money when you're flipping a distressed Duarte property or need bridge financing before permanent loans kick in. Speed and flexibility justify the cost when your profit happens in months, not years.
Most experienced investors use both for different deals. DSCR finances the long-term portfolio, hard money funds the quick flips that generate capital for more rentals down the line.
Yes, most investors use hard money to buy and renovate, then refinance into DSCR once the property is rent-ready and appraised at higher value. This strategy pulls renovation costs back out.
DSCR lenders typically require properties to be rent-ready at closing. Light cosmetic work is fine, but major systems or structural issues usually disqualify until repairs finish.
With clear title and a solid deal, hard money closes in 5-7 business days. Complicated title issues or weak comparable sales slow things down to 10-14 days.
Stabilized rentals typically run 1.1 to 1.3 in Duarte depending on purchase price and rent levels. Anything below 1.0 won't qualify without larger down payments.
First-time flippers can get hard money but expect higher rates and more equity required. Lenders want bigger buffers when you haven't proven you can execute renovations on time.