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in Palos Verdes Estates, CA
Palos Verdes Estates investors face a clear choice: DSCR loans for stabilized rentals or hard money for quick acquisitions and flips. Both skip personal income verification, but they serve completely different strategies.
DSCR loans work when you own a property that generates rent. Hard money works when you need cash fast to buy or renovate. Understanding this split saves you from applying for the wrong loan.
DSCR loans qualify you based on rental income, not your tax returns. You need a property that generates enough rent to cover the mortgage payment, ideally at a 1.25 ratio or higher.
Expect 20-25% down, rates 1-2 points above conventional, and 30-year terms. These are true long-term mortgages designed to hold, not flip. Close in 30-45 days with 12-24 months of bank statements.
Hard money lenders fund deals based on property value, not your financials. They care about equity and exit strategy. You can close in 7-14 days when a deal requires speed.
Rates run 8-12% with 2-5 points upfront. Terms are 6-24 months, not 30 years. This is bridge financing for acquisitions, rehabs, or situations where timing trumps rate. You pay for speed and flexibility.
DSCR loans require rental income and want long-term holds. Hard money requires equity and a clear exit plan within 24 months. One is a mortgage replacement, the other is temporary capital.
DSCR down payments start at 20%. Hard money can go to 35-40% loan-to-value depending on project risk. DSCR has lower rates but stricter property condition standards. Hard money funds distressed properties DSCR lenders reject.
Use DSCR if you're buying a rental property you plan to hold for years in Palos Verdes Estates. Use hard money if you're buying a fixer in an estate sale, flipping a property, or need to close before another buyer.
Most sophisticated investors use both. Hard money funds the purchase and renovation. DSCR refinances the completed project into permanent financing. This combination lets you act fast and hold long-term at reasonable rates.
No. DSCR loans require rent-ready properties with stable income. Hard money is built for renovations and short-term holds before selling.
Hard money closes in 7-14 days. DSCR takes 30-45 days because it's a full mortgage with title, appraisal, and underwriting.
Neither verifies W-2 income or tax returns. DSCR qualifies on property rent. Hard money qualifies on property value and equity.
Yes. Most investors use hard money to buy and renovate, then refinance into DSCR for long-term rental holding at lower rates.
DSCR has lower rates but standard closing costs. Hard money has higher rates and points but speeds that save deals.