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in Paramount, CA
Both DSCR and hard money loans bypass traditional income verification, making them go-to options for Paramount investors. The difference comes down to your timeline and property strategy.
DSCR loans work for buy-and-hold rental properties where cash flow matters. Hard money loans fund quick acquisitions and fix-and-flip projects where speed beats cost.
DSCR loans qualify you based on rental income, not your tax returns. If the property generates enough rent to cover the mortgage payment (typically 1.0x to 1.25x), you're approved.
You get 30-year fixed terms with rates slightly above conventional loans. Expect 20-25% down, and closing takes 3-4 weeks. Most Paramount investors use DSCR for single-family rentals and small multifamily properties.
Hard money loans fund deals in days, not weeks. Lenders care about the property's current and after-repair value, not your income or the rental potential.
Terms run 6-24 months with higher rates and points upfront. You'll pay 10-15% interest plus 2-5 points at closing. Most Paramount investors use hard money to acquire distressed properties, renovate fast, then refinance or sell.
DSCR loans cost less but take longer. Hard money loans close fast but cost significantly more. DSCR requires the property to already produce rent or be rent-ready. Hard money funds properties in any condition.
DSCR lenders want 620+ credit and seasoned investors. Hard money lenders focus on the deal itself and often approve borrowers with credit issues. Exit strategy differs too—DSCR is your long-term hold, hard money is your bridge to the next move.
Choose DSCR if you're buying a rental property to hold for years. The lower rate and long-term financing make sense when you're collecting rent each month. Most Paramount buy-and-hold investors default to DSCR.
Pick hard money when you need to close fast or the property needs major work. If you're competing with cash offers on a fixer in Paramount or flipping a distressed property, hard money gets you in the door. Just have a clear exit plan—refinance to DSCR or sell within your loan term.
Yes, this is common for flips-to-rentals. Acquire and renovate with hard money, then refinance to DSCR once the property is rent-ready and stabilized.
DSCR loans typically need 620+ credit. Hard money lenders care more about the deal and may approve scores in the 500s if the property value supports it.
Yes. DSCR works great for 2-4 units as long-term holds. Hard money funds larger multifamily rehab projects but expect higher down payments on bigger deals.
DSCR loans typically require 20-25% down. Hard money lenders want 10-30% depending on the property condition and your experience level.
Not usually. DSCR lenders want rent-ready properties with existing or immediate rental income. Use hard money first, then refinance to DSCR after repairs.