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in San Marino, CA
San Marino investors often ask whether to use DSCR or hard money financing. Both skip personal income verification, but they serve completely different strategies.
DSCR works for buy-and-hold rental properties with steady income. Hard money finances quick flips and rehabs where speed beats cost.
DSCR loans qualify you based on rental income, not your tax returns. Lenders calculate the debt service coverage ratio by dividing monthly rent by the mortgage payment.
You need a ratio above 1.0 for most approvals. Rates run 1-2% higher than conventional loans, but terms stretch 30 years like traditional mortgages.
Expect 20-25% down and credit scores above 620. Closing takes 30-45 days, similar to standard purchase loans.
Hard money lenders fund based on property value, not income or credit. They focus on after-repair value and exit strategy.
Rates range from 8-15% with 2-5 points upfront. Terms run 6-24 months because these are bridge loans, not permanent financing.
You can close in 7-14 days with less documentation. Most hard money loans require 25-30% down and work for properties needing significant repairs.
Cost separates these loans dramatically. DSCR rates sit in the 7-9% range while hard money runs 10%+ with heavy points.
Timeline matters just as much. DSCR takes a month to close but hard money funds in two weeks when you need speed.
Property condition creates another split. DSCR requires rent-ready properties while hard money finances distressed assets needing rehab work.
Choose DSCR when buying stabilized San Marino rentals you'll hold for years. The lower rate and long term make sense for cash flow properties.
Pick hard money for competitive situations or major renovations. You're paying for speed and flexibility, then refinancing into permanent financing.
Most San Marino investors use hard money to acquire and renovate, then convert to DSCR once the property generates rental income. They're tools for different phases.
Yes, this is common. Once your renovation is done and the property has rental income, you refinance into DSCR for long-term financing.
Hard money approves faster with less documentation. DSCR requires more paperwork but still avoids personal income verification.
Yes, but verify loan limits with your lender. Both programs can handle higher-value properties common in San Marino.
DSCR payments run significantly lower due to better rates and 30-year amortization. Hard money is short-term bridge financing.
Not until it's rent-ready. DSCR requires occupied or immediately rentable properties that generate verifiable income.