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in El Monte, CA
El Monte investors face a choice between two distinct financing paths. DSCR loans work for rental cash flow plays, while hard money funds quick flips and rehabs.
Most borrowers confuse these options because both skip W-2 income verification. The right choice depends on your exit strategy and timeline, not just what you can qualify for.
DSCR loans qualify you based on rental income divided by mortgage payment. If that ratio hits 1.0 or higher, you're in the game regardless of your tax returns or pay stubs.
You get 30-year fixed terms just like conventional loans. Rates run 1-2% higher than agency products, but you close in your LLC and scale without income limits.
El Monte's multifamily stock works well here. Duplexes and triplex properties generate the consistent rent these loans require for approval.
Hard money lenders fund based on property value, not your financials or the rent. They care about equity and your exit plan, nothing else.
Terms run 6-24 months with rates between 9-14%. You pay points upfront, typically 2-4% of the loan amount, and interest-only payments monthly.
These loans close in 7-10 days when you need to beat cash offers. El Monte's older housing stock makes them ideal for tear-down or heavy rehab projects.
DSCR loans cost less but take 3-4 weeks to close. Hard money costs more but funds in a week when speed matters.
The term difference changes everything. DSCR gives you 30 years to hold and rent. Hard money forces a sale or refinance within two years maximum.
DSCR requires the property to cash flow from day one. Hard money doesn't care about current condition or rent potential, just after-repair value.
Choose DSCR when you plan to hold the property as a rental. The lower rate and long term make cash flow work on El Monte's typical cap rates.
Choose hard money when you're flipping or the property needs work before it can rent. Speed and condition flexibility justify the higher cost on short holds.
Most active investors use both. Hard money funds the acquisition and rehab, then DSCR refinances into permanent financing once tenants are in place.
No. DSCR lenders require rent-ready condition and immediate cash flow. Fix it with hard money first, then refinance to DSCR.
DSCR loans run 1-2% above conventional rates. Hard money sits at 9-14%. Rates vary by borrower profile and market conditions.
Yes. Both DSCR and hard money lenders fund to LLCs without issue. Hard money actually prefers entity ownership for liability reasons.
DSCR typically needs 20-25% down. Hard money requires 25-35% based on after-repair value and your experience level.
Yes, that's the standard strategy. Use hard money to acquire and fix, then cash-out refinance to DSCR for long-term hold.