Loading
in Malibu, CA
Malibu's coastal real estate attracts investors with capital but complicated tax returns. DSCR loans qualify you on rental income alone, while hard money lenders focus on the property's after-repair value.
Both skip W-2 verification, but they serve different timelines. DSCR works for cash-flowing rentals you plan to hold. Hard money finances quick flips or value-add plays that need fast funding.
DSCR loans approve based on whether your Malibu rental covers the mortgage payment. Lenders divide monthly rent by the proposed PITI payment—1.0 or higher usually qualifies. You need 12 months reserves and 20-25% down.
Rates run 1-2% above conventional, typically 7-9% in current conditions. Rates vary by borrower profile and market conditions. Terms stretch to 30 years fixed, making them sustainable for long-term coastal rentals with stable income.
Hard money lenders fund based on Malibu property value, not your financials. They'll lend 65-75% of current value or after-repair value, whichever serves the deal. Approvals happen in days, closings in 1-2 weeks.
Expect 9-14% rates plus 2-4 points upfront. Terms run 6-24 months—you're refinancing out or selling when the project completes. These loans cost more but move faster than any bank product.
Timeline separates these products. DSCR suits stabilized rentals generating income now—beachfront units already leased at market rate. Hard money finances distressed properties needing renovation before they cash flow.
Cost structure flips the equation. DSCR charges lower rates over 30 years. Hard money hits you with higher rates and points but only for months, not decades. Your exit strategy determines which math works.
Use DSCR when you're buying a Malibu rental that already generates income and you plan to hold it. The property needs to cover the payment from day one. You're building a portfolio, not flipping for quick profit.
Choose hard money when you're renovating a distressed property, need to close in a week to beat competition, or the home can't qualify for traditional financing yet. You have a clear exit—refinance to DSCR or sell within a year.
Yes, that's a common strategy. Use hard money to buy and renovate, then refinance to DSCR once the property generates rental income and appraises at the new value.
DSCR typically requires 640+ credit. Hard money cares less about credit—some lenders approve with 600 or lower if you have enough equity in the deal.
Yes. Neither requires US income documentation. DSCR wants reserves in a US account, hard money just needs equity and a viable exit plan.
DSCR requires 20-25% down. Hard money lends up to 75% of value, so you need 25-35% down depending on the property and renovation scope.
Hard money wins on speed—1-2 weeks typical. DSCR takes 3-4 weeks minimum, similar to conventional loans but without income verification.