Loading
in Huntington Park, CA
Huntington Park investors face a choice between two rental property financing paths. DSCR loans use rental income to qualify, while hard money lenders fund based on property value alone.
Most fix-and-flip buyers start with hard money for speed. Buy-and-hold investors refinance into DSCR loans once tenants move in and cash flow stabilizes.
DSCR loans approve based on one number: monthly rent divided by monthly mortgage payment. If that ratio hits 1.0 or higher, you qualify regardless of tax returns or employment.
Expect 20-25% down, rates around 7-9%, and 30-year terms. These work for stabilized rentals with tenants already paying rent, not properties you plan to flip in six months.
No income verification means self-employed investors and those with complex tax returns skip the document treadmill. The property itself does the qualifying work.
Hard money lenders fund in days, not weeks. They care about property value and your exit strategy, not your credit score or income documentation.
Terms run 6-24 months with rates from 9-14% plus 1-3 points upfront. You pay for speed and flexibility, not long-term affordability.
These loans shine for time-sensitive acquisitions and major rehabs in Huntington Park. Investors use them to grab deals competitors can't close fast enough to win.
Speed splits these loans apart. Hard money funds before DSCR lenders finish ordering the appraisal, but you pay 3-5% more in rate for that urgency.
Term length matters more than investors expect. DSCR loans amortize over 30 years, building equity slowly while cash flow covers payments. Hard money balloons in under two years, forcing a sale or refinance.
Down payment requirements favor DSCR loans at 20-25% versus hard money's 25-35%. But hard money approves deals DSCR lenders reject, like major fixer properties with zero current rent.
Pick hard money when the deal won't wait. Foreclosure auctions, distressed properties, and competitive markets where sellers want seven-day closes all demand hard money speed.
Choose DSCR loans for turnkey rentals with stable tenants. If the property already generates rent and you plan to hold for years, lower rates and longer terms beat hard money every time.
Many Huntington Park investors use both: hard money to acquire and renovate, then refinance into a DSCR loan once tenants occupy and cash flow proves itself. That's the standard playbook.
Yes, once tenants occupy and generate rent for 3-6 months. Most investors plan this exit strategy from day one to lock in lower long-term rates.
Hard money approves faster with less documentation. DSCR loans require appraisals and rent verification, adding 2-3 weeks to timelines but offering better terms.
No, DSCR lenders need existing rental income to calculate the debt service coverage ratio. Use hard money for properties requiring major rehab before renting.
DSCR loans typically need 680+ credit. Hard money lenders care less about scores, approving deals at 600+ if property equity covers their risk.
No, both are investor products. DSCR and hard money loans fund non-owner-occupied rental properties and fix-and-flip projects only.