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in San Gabriel, CA
San Gabriel's rental market attracts serious investors, but choosing the wrong financing kills deals. DSCR loans work for cash-flowing properties you plan to hold. Hard money funds flips and heavy rehabs where speed matters more than rate.
Both skip W-2 income verification—lenders focus on the property instead. Your strategy determines which tool makes sense. Hold for rental income or fix and flip fast, the loan type changes everything.
DSCR loans qualify based on rental income divided by mortgage payment. You need a ratio above 1.0, meaning rent covers the debt. These are 30-year loans with rates 1-2% above conventional, and you can close in 2-3 weeks.
Expect 20-25% down and a 620+ credit score minimum. Lenders calculate DSCR using market rent or a current lease. San Gabriel's steady rental demand works well for DSCR qualification since properties typically generate strong ratios.
Hard money lenders fund based on after-repair value, not current condition. You get 6-12 month terms at 9-14% rates plus 2-4 points upfront. Speed is the advantage—closings happen in 5-10 days when you need to lock a property fast.
Most deals max out at 65-75% loan-to-value including rehab costs. Credit matters less than equity and exit strategy. These loans fund tear-downs, major renovations, or purchases where traditional financing won't touch the property yet.
Rate spread tells the story. DSCR loans run 7-9% depending on credit and property. Hard money hits 9-14% plus points, but you're paying for speed and flexibility on distressed assets.
Timeline matters more than most investors think. DSCR takes 2-3 weeks and requires appraisals and title work. Hard money closes in days because lenders care about equity, not paperwork. If you're competing against cash buyers in San Gabriel, hard money keeps you in the game.
Exit strategy determines fit. DSCR loans work when you're holding for rental cash flow long-term. Hard money bridges you to a refinance or sale after rehab. Mix them wrong and you'll either overpay for a rental or get stuck with a short-term loan on a property you want to keep.
Choose DSCR when you're buying a rent-ready property or minor fixer that'll cash flow immediately. The lower rate saves thousands over time, and 30-year terms mean stable payments while you build equity through appreciation and principal paydown.
Pick hard money for distressed properties, competitive bidding situations, or major rehabs. You need speed to close or the property won't qualify for traditional financing yet. Plan your refinance or sale timeline before you sign—these loans aren't meant to be held long-term.
San Gabriel investors often start with hard money to acquire and renovate, then refinance into DSCR once the property stabilizes. That combination maximizes speed during acquisition and rate efficiency during the hold phase.
DSCR loans fund properties in rentable condition, not major rehabs. Light cosmetic work is fine if the property appraises and can generate qualifying rent immediately.
Most hard money lenders close in 5-10 days with clear title and strong equity. Some do 3-day closings if you're paying cash-equivalent terms and waiving contingencies.
Most lenders want 1.0 or higher, meaning rent covers the mortgage payment. Some accept 0.75 ratios with larger down payments and strong credit profiles.
They look but won't decline solely on score. Equity and exit strategy matter more. Expect higher rates below 600 credit, but deals still fund.
Yes, that's a common strategy. Complete your rehab, wait for seasoning requirements if any, then refinance into DSCR for long-term rental hold.
DSCR handles 2-4 units easily since rental income qualifies you. Hard money funds larger projects but expect stricter LTV and higher rates on 5+ units.