Question 1

Can I use DSCR loans for fix-and-flip properties in Lakewood?

Accepted Answer

No. DSCR loans require rental income, which flips don't generate. Use hard money for flips, then refinance to DSCR if you decide to hold the property as a rental.

Question 2

Which loan has lower total costs over 12 months?

Accepted Answer

DSCR wins on annual cost despite higher closing fees. Hard money's 12%+ rate and points typically cost double what you'd pay on a DSCR loan over the same period.

Question 3

Do hard money lenders care about my credit score?

Accepted Answer

Barely. Most approve borrowers with scores under 600 if the deal has enough equity. They lend on the property's value and your exit plan, not your credit history.

Question 4

Can I refinance hard money into a DSCR loan?

Accepted Answer

Yes, if the property generates rental income and meets DSCR requirements. Most Lakewood investors plan this exit before taking hard money. Verify rental comps support a 1.0+ DSCR ratio first.

Question 5

How much down payment does each loan require?

Accepted Answer

DSCR typically needs 20-25% down. Hard money ranges from 10-30% depending on property condition and your experience level. Riskier deals require larger equity cushions.

DSCR Loans vs Hard Money Loans in Lakewood: Which Fits Your Investment Strategy?