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in Hermosa Beach, CA
Hermosa Beach investors face a choice between two non-QM paths. DSCR loans use rental income to qualify. Hard money loans fund deals based on property value alone.
Both skip personal income verification. But their use cases couldn't be more different. DSCR works for cash-flowing rentals. Hard money fits fix-and-flip projects or quick closings.
DSCR loans finance rental properties without W-2s or tax returns. Lenders approve you based on the property's rent compared to its mortgage payment. A ratio above 1.0 means the rent covers the loan.
Terms run 30 years with rates typically 1-2% above conventional. You need 20-25% down and decent credit—usually 660 minimum. These work for long-term holds in beach cities where rents stay strong.
Hard money loans close in 7-14 days based on property value. No income verification. No credit score minimums in most cases. Lenders care about the asset and your exit strategy.
Terms run 6-24 months with rates from 8-12%. Expect 2-4 points upfront. You need 25-35% down or equity. These fit flips, heavy renovations, or situations where speed matters more than cost.
Timeline separates these loans first. DSCR takes 30-45 days to close. Hard money funds in under two weeks. Cost differences are massive—DSCR rates run 7-9% while hard money hits 10%+.
Strategy drives the choice. DSCR requires a performing rental with established rent. Hard money doesn't care about current rent—only after-repair value. One finances stability. The other finances opportunity.
Choose DSCR when buying a turnkey rental in Hermosa Beach. You want 30-year financing with lower rates. The property already generates rent or can rent quickly without major work.
Pick hard money for distressed properties or time-sensitive deals. You're renovating a beach bungalow to flip. Or you're buying at auction and need to close fast. The higher cost buys you speed and flexibility.
Only if it's already habitable and can generate rent during minor updates. Major renovations need hard money first, then refinance to DSCR after completion.
Hard money approves faster with lower credit requirements. DSCR needs stronger credit and proof the property's rent covers the mortgage payment.
Yes, most investors do exactly this. Complete your flip or renovation, establish rental income, then refinance into long-term DSCR financing.
No. Both are investor-only products. DSCR requires rental income documentation. Hard money lenders fund investment properties exclusively.
Hard money costs significantly more due to higher rates and points. But you shouldn't hold hard money for 12 months—refinance or sell within 6-8 months.