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in Rosemead, CA
Rosemead investors need different tools for different deals. DSCR loans work for rental holds, hard money for quick flips.
Both skip W-2 income verification, but they serve opposite timelines. One finances cash flow, the other finances speed.
Understanding which loan matches your exit strategy saves thousands in interest and closes deals faster in this competitive market.
DSCR loans qualify you based on rental income alone. Lenders want the property's rent to cover 1.0x to 1.25x the monthly mortgage payment.
These are long-term loans with 30-year terms and rates typically 1-2% above conventional. You'll need 20-25% down and a 620+ credit score.
DSCR works for investors building rental portfolios in Rosemead's single-family and multifamily properties. You get stable financing without proving employment.
Expect 30-45 days to close. Lenders order appraisals and rental comparables to confirm the property can support the debt.
Hard money loans fund based on the property's after-repair value, not your financials. Lenders care about equity and exit strategy.
Terms run 6-24 months with rates between 8-15%. You'll pay 2-5 points upfront, and most require interest-only payments.
These loans close in 5-10 days, making them perfect for competitive Rosemead properties that need fast cash offers. Credit matters less than the deal itself.
Hard money funds purchases and rehab costs in one loan. You'll need skin in the game, usually 10-20% of the purchase price plus renovation budget.
Timeline separates these loans. DSCR takes a month and funds long holds. Hard money closes in a week and funds short flips.
Rates and costs differ dramatically. DSCR runs 7-9% with minimal fees. Hard money hits 10-15% plus points that can exceed $10,000 upfront.
DSCR requires rent rolls and lease agreements to prove cash flow. Hard money needs repair budgets and comps showing after-repair value.
Exit strategies dictate which works. DSCR assumes you'll refinance or hold indefinitely. Hard money assumes you'll sell or refi within 12 months.
Choose DSCR if you're buying a Rosemead rental to hold long-term. The property needs to be rent-ready or need only minor cosmetic work.
Hard money makes sense for properties requiring major renovation or when you need to close before a DSCR loan can fund. You must have a clear exit within 12 months.
Some investors use both: hard money to buy and renovate, then refinance into DSCR once the property is rented. This strategy maximizes speed and long-term affordability.
Neither works well for primary residences or properties you plan to owner-occupy. These are strictly investor products.
No. DSCR loans require the property to generate immediate rental income. Use hard money for flips, then refinance into DSCR if you decide to hold.
DSCR has lower upfront costs. Hard money charges 2-5 points at closing, which can exceed $15,000 on a typical Rosemead investment property.
DSCR requires 620+ credit. Hard money lenders accept scores as low as 550 if the deal and equity position are strong enough.
Yes, this is common. Complete renovations, place a tenant, then refinance into DSCR for lower rates and long-term financing.
DSCR doesn't count against conventional loan limits. Hard money has no property count restrictions either. Both scale better than conventional financing.