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in Rolling Hills, CA
Rolling Hills investors face a clear choice: DSCR loans for stable rental income or hard money for quick flips and renovations. Both skip the W-2 income verification that kills most traditional loans for real estate investors.
DSCR loans fund based on what the property earns. Hard money lenders care about equity and exit strategy, not your tax returns or the rental income.
DSCR loans qualify you on rental income alone. The property needs to generate enough rent to cover the mortgage payment, typically a 1.0 to 1.25 ratio.
You get 30-year terms at fixed rates, usually 1-2 points above conventional. No tax returns, no employment verification, just the property's ability to pay for itself.
Most DSCR lenders want 20-25% down and credit scores above 660. The property must appraise and show market-rate rent potential through a rent schedule or lease.
Hard money loans fund in days, not weeks. Rates run 9-14% with 2-5 points upfront, but you close fast and the property condition doesn't kill the deal.
These are 6 to 24-month bridge loans for investors who need speed or have properties that won't qualify elsewhere. Lenders loan on after-repair value, not current condition.
Expect to put 25-40% down depending on your experience and the deal structure. Credit matters less than equity and your exit plan to refinance or sell.
Timeline separates these loans completely. DSCR takes 21-30 days to close. Hard money funds in under two weeks, sometimes five days for experienced investors.
Cost structure flips too. DSCR runs 7-9% with lower fees for long holds. Hard money hits 10-14% with heavy points because you're paying for speed and flexibility, not cheap money.
Property condition matters differently. DSCR lenders need rent-ready properties that appraise clean. Hard money funds fixer-uppers based on what they'll be worth after work.
Choose DSCR if you're buying a rental property you plan to hold for years. The longer timeline doesn't matter when you're building a portfolio with stable financing.
Pick hard money when closing speed matters more than rate, or the property needs work before it qualifies for anything else. You'll refinance out within a year anyway.
Rolling Hills investors often use both strategically: hard money to acquire and renovate, then DSCR to refinance into permanent financing once the property stabilizes with tenants.
No, DSCR lenders require rent-ready properties that appraise in current condition. Use hard money first, complete repairs, then refinance to DSCR.
Hard money closes in 5-10 days typically. DSCR loans take 21-30 days because they require full appraisals and title work like conventional loans.
DSCR loans accept newer investors with good credit. Hard money lenders prefer experienced investors or charge higher rates for first-timers with unproven exit strategies.
DSCR lenders typically require 660-680 minimum. Hard money lenders care less about credit, some approve with scores in the 500s if equity is strong.
Not practically, rates are too high for holds beyond 24 months. Plan to refinance into DSCR or conventional financing once the property stabilizes.
Hard money costs more short-term with 9-14% rates plus 2-5 points. DSCR runs 7-9% with lower fees but you pay interest for 30 years.