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in Lawndale, CA
Lawndale investors face a choice between two distinct financing paths. DSCR loans work for rental holds, while hard money fits quick flips.
Both skip traditional income verification, but they serve opposite strategies. Your timeline and exit plan determine which one makes sense.
DSCR loans qualify you based on the property's rental income, not your personal earnings. Lenders want a ratio above 1.0, meaning rent covers the mortgage payment.
You get 30-year fixed terms with rates typically 1-2% above conventional. Most investors need 20-25% down and a 620+ credit score.
These work for buy-and-hold investors building Lawndale rental portfolios. You can close in 3-4 weeks without submitting paystubs or employment letters.
Hard money loans fund based on the property's after-repair value, not your income or credit. Lenders lend 65-75% of ARV, covering both purchase and renovation costs.
Expect rates of 9-14% with 1-3 year terms and interest-only payments. Points run 2-4% of the loan amount upfront.
This financing fits fix-and-flip deals where you need fast cash and plan to exit quickly. Approvals happen in days, closings in 1-2 weeks.
DSCR loans cost less but take longer. Hard money costs more but moves faster. Rate difference runs 5-8 percentage points.
DSCR requires the property to cash flow from day one. Hard money doesn't care about current condition or rent—only the exit value after repairs.
Credit matters for DSCR but barely registers for hard money. DSCR wants 620+, hard money will fund with 550 if the deal works.
Choose DSCR if you're buying a rental property you plan to hold. The lower rate matters when you're making payments for years.
Pick hard money for flips or properties needing major work. Speed and flexibility justify the higher cost when you're selling in 6-12 months.
Most Lawndale investors use hard money to acquire and renovate, then refinance into DSCR for the long-term hold. That's the one-two punch.
Only if it's already habitable and rented. DSCR lenders need current rental income to qualify you, so major rehabs don't work.
No. They fund based on the property's value and your exit strategy, not your W-2 or tax returns.
DSCR typically requires 620+. Hard money lenders will go as low as 550-580 if the deal has strong equity.
Yes, that's a common strategy. Finish the rehab, get tenants in place, then refinance to a lower long-term rate.
Hard money costs more upfront with 2-4 points. DSCR has standard closing costs similar to conventional loans.
DSCR goes up to 80% LTV on the purchase price. Hard money lends 65-75% of the after-repair value.