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in Long Beach, CA
Long Beach investor deals run the full spectrum—turnkey beach rentals, gut rehabs near the Queen Mary, multifamily conversions in Bixby Knolls. DSCR loans and hard money loans both fund investment properties without W-2 income verification, but they serve completely different strategies.
DSCR loans work for buy-and-hold investors who want rental income to cover the mortgage. Hard money loans fund quick acquisitions and flips where speed matters more than rate. Choosing wrong costs you thousands in rate difference or kills a time-sensitive deal.
DSCR loans qualify you based on rental income versus mortgage payment—nothing else. If rent covers 100% or more of your monthly PITI, most lenders approve regardless of your tax returns. Rates run 7-9% with 15-30 year terms, which makes them viable for long-term holds.
You need 20-25% down and decent credit, usually 620 minimum. Lenders calculate DSCR by dividing projected rent by your total monthly payment. A 1.0 ratio means rent exactly covers costs; most require 1.0-1.25 depending on credit score and reserves.
Hard money loans fund based on property value and exit strategy, not income or credit. Lenders care about the deal—purchase price, after-repair value, your experience flipping properties. Rates run 9-14% with 1-3 point origination fees, and terms max out at 12-24 months.
You can close in 7-10 days when competing against cash offers in Belmont Shore or Alamitos Beach. Most lenders fund 65-75% of purchase price or ARV, whichever is lower. This loan covers acquisition and often rolls rehab costs into one package for fix-and-flip projects.
Rate difference hits you first—DSCR loans run 7-9% while hard money starts at 9% and climbs past 12%. But DSCR loans take 30-45 days to close versus 7-10 days for hard money. If you're bidding on a distressed duplex in North Long Beach against cash buyers, speed wins.
DSCR requires the property to cash flow immediately or within 30 days of closing. Hard money doesn't care about cash flow because you're selling within a year. Credit matters for DSCR—you need 620 minimum. Hard money lenders look past 550 scores if the deal math works and you have skin in the game.
Use DSCR when you're buying a rental that already generates income or needs minor cosmetic work. Long Beach has strong rental demand near Cal State Long Beach and downtown—those properties work perfectly for DSCR. You get lower rates and long-term financing that lets you hold through market cycles.
Pick hard money when you need to close fast on a flip or heavy rehab. Distressed properties in Central Long Beach or properties sold at auction require quick funding that DSCR lenders can't match. Plan your exit before you close—hard money rates kill profits if you hold past 12 months.
DSCR won't work for non-habitable properties or major rehabs. Most lenders require rent-ready condition or minor repairs only, which eliminates gut jobs.
Most Long Beach hard money lenders approve deals with 550+ credit if the property supports their loan-to-value limits. Some look past score entirely for experienced flippers.
DSCR handles 2-4 unit properties easily. Hard money works for multifamily only if you're flipping or converting units, not holding long-term.
Yes, this is a common strategy. Complete rehab, stabilize rent, then refi into DSCR to lock lower rates for long-term holding.
Both work for remote investors. DSCR is easier since it's fully documented. Hard money requires stronger sponsor experience if you're buying from out of state.