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in Maywood, CA
Maywood investors face a choice: use rental income to qualify or move fast with asset-based lending. DSCR loans work for stabilized rentals with cash flow. Hard money fits fix-and-flips or properties that need work before they can rent.
Both skip W-2 income verification, but they serve different timelines and strategies. One finances long-term holds. The other gets you in and out of distressed properties quickly.
DSCR loans qualify you on rental income alone. Lenders calculate your property's monthly rent divided by its monthly debt payment. You need a ratio above 1.0, ideally 1.25 or higher for the best rates.
Terms run 30 years with fixed or adjustable rates. Expect 20-25% down and rates 1-3% above conventional. These work for turnkey rentals or properties ready to lease within 30 days of closing.
Credit requirements sit around 620-680 depending on the DSCR. No tax returns or pay stubs required. The property finances itself on paper, which is the whole point.
Hard money lenders fund based on the property's after-repair value, not your income or credit. They close in 7-14 days when you need speed. Rates run 9-14% with 2-4 points upfront.
Loan terms last 6-24 months because these are bridge loans, not permanent financing. You put down 10-30% depending on experience and deal quality. The property's equity secures the loan, period.
Most hard money lenders want an exit strategy before funding. That means a refinance plan into DSCR or conventional, or a sale timeline. They're not in the business of long-term holds.
Cost separates these loans immediately. DSCR rates land 1-3% above conventional mortgages. Hard money costs 9-14% plus hefty origination fees. That higher cost only makes sense when speed or property condition demands it.
Timeline matters just as much. DSCR loans close in 30-45 days and finance properties for decades. Hard money closes in under two weeks but forces a refinance or sale within two years maximum.
Property condition creates the clearest divide. DSCR requires rent-ready or near-ready properties that appraise cleanly. Hard money funds distressed properties, major renovations, and deals conventional lenders won't touch.
Use DSCR when you're buying a rental that's already generating income or will within a month. Maywood multifamily properties in decent shape fit this perfectly. You get lower rates and permanent financing in one move.
Choose hard money for foreclosures, estate sales, or properties needing major work before they're rentable. The speed lets you compete with cash buyers. The higher cost is temporary if your exit plan is solid.
Many investors use both in sequence. Hard money funds the acquisition and renovation. DSCR refinances the property once it's stabilized and renting. That combination maximizes speed upfront and cost savings long-term.
Yes, this is the standard exit strategy. Once renovations finish and the property generates rent, DSCR loans refinance your hard money loan at lower rates.
Hard money closes in 7-14 days. DSCR loans take 30-45 days because they require full appraisals and rental income verification.
Correct. DSCR qualifies on rental income only. Hard money qualifies on property value and equity, ignoring your W-2 completely.
DSCR requires 20-25% down. Hard money asks 10-30% depending on deal specifics and your experience level.
Hard money costs significantly more due to rates near 12% plus points. Use it only when speed or property condition requires it.