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in Manhattan Beach, CA
Manhattan Beach investment properties demand smart financing. Both DSCR and hard money loans skip traditional income verification, but they serve completely different purposes.
DSCR loans work for buy-and-hold investors who need long-term financing. Hard money fits fix-and-flip projects where speed matters more than rate. Choosing wrong costs you thousands.
DSCR loans qualify you based on rent the property generates. If rent covers 1.0x to 1.25x the mortgage payment, you can get approved regardless of personal income.
These are 30-year mortgages with rates typically 1-2% above conventional. You need 20-25% down and a 620+ credit score. They close in 3-4 weeks, which works fine for rental investments.
Hard money loans fund based on property value, not income or credit. Lenders care about the asset and your exit strategy. These loans close in 5-10 days when you need to move fast.
Expect 8-12% rates plus 2-4 points upfront. Terms run 6-24 months because these aren't designed for long holds. You'll need 25-35% down depending on the deal and lender appetite.
Local decision guide
Use this comparison to weigh DSCR Loans and Hard Money Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Manhattan Beach.
Manhattan Beach investment properties demand smart financing. Both DSCR and hard money loans skip traditional income verification, but they serve completely different purposes.
DSCR loans work for buy-and-hold investors who need long-term financing. Hard money fits fix-and-flip projects where speed matters more than rate. Choosing wrong costs you thousands.
DSCR loans qualify you based on rent the property generates. If rent covers 1.0x to 1.25x the mortgage payment, you can get approved regardless of personal income.
Cost separates these loans dramatically. DSCR rates hover around 7-8% with minimal fees. Hard money runs 10%+ with 2-4 points at closing. On a $1.5M Manhattan Beach property, that's $30K-$60K in extra upfront costs.
Timeline is the other major split. DSCR takes 3-4 weeks and requires appraisals and title work. Hard money can close in a week with lighter documentation. If you're competing against cash buyers, hard money keeps you in the game.
Choose DSCR if you're buying a rental to hold long-term. Manhattan Beach properties rent well, and DSCR lets you lock in 30-year financing without proving W-2 income. The lower rate saves you $2K-$3K monthly on a $1.5M loan.
Pick hard money when you're flipping or need to close before a DSCR loan can fund. Say you found a beach-close fixer that needs $300K in work. Hard money gets you in, you renovate, then you either sell or refinance to DSCR. It's bridge financing, not permanent debt.
Yes, this is common. Complete your rehab, establish rental income, then refinance to a DSCR loan. The property needs 6-12 months of rent history for best DSCR terms.
Hard money accepts credit scores below 600 if the deal makes sense. DSCR lenders want 620+ minimum, though some go to 600 with higher rates.
Yes, both work. Hard money lenders love the area because resale is strong. DSCR works if rents hit the 1.0x debt coverage ratio.
On a 12-month hard money hold, expect to pay 5-6% more in total costs versus DSCR. That's $75K-$90K extra on a $1.5M loan due to higher rates and points.
No, DSCR requires the property to be rent-ready. Use hard money during construction, then switch to DSCR once it's stabilized and leased.