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in Temple City, CA
Temple City investors face a choice: long-term rental financing through DSCR loans or short-term acquisition capital via hard money. Both skip traditional income verification, but they serve completely different investment strategies.
DSCR loans work for buy-and-hold investors who want stability and lower rates. Hard money works for fix-and-flip deals where speed matters more than cost.
DSCR loans qualify you based on rent, not paystubs. If the property generates enough income to cover the mortgage payment (typically 1.0x to 1.25x), you're approved. These come with 30-year fixed terms and competitive rates for rental investors.
Temple City's rental market makes DSCR loans viable for single-family homes and small multifamily properties. You'll need 20-25% down and a 620+ credit score. The property cash flow does the qualifying work.
Hard money loans fund based on the property's after-repair value, not your financials. Lenders care about equity cushion and exit strategy. You get approval in days, funding in 1-2 weeks, and pay 9-14% interest plus 2-5 points upfront.
Fix-and-flip investors use hard money to grab Temple City properties fast, especially in competitive situations. Terms run 6-24 months. The trade-off: high cost for speed and flexibility when traditional lenders won't touch distressed properties.
The rate gap is massive. DSCR loans currently run 7-9% for 30 years. Hard money hits 9-14% for under two years, plus you pay 2-5 points at closing. On a $500K loan, that's $10K-$25K in upfront costs before the first payment.
Timeline and approval criteria split opposite ways. DSCR takes 30-45 days and requires solid credit and rental income documentation. Hard money closes in 7-14 days and ignores credit scores below 600, focusing purely on deal math and equity.
Exit strategies matter more than anything. DSCR assumes you're holding long-term and collecting rent. Hard money assumes you're selling or refinancing within 12-18 months. Pick the wrong one and you'll either overpay or miss the deal.
Choose DSCR if you're buying a Temple City rental to hold for years. The lower rate saves you thousands monthly, and the 30-year term gives you predictable cash flow. You need clean credit and patience through underwriting, but the economics make sense for buy-and-hold.
Choose hard money if you're flipping a fixer or need to close in under two weeks. The rate hurts, but missing a deal costs more than paying 12% for eight months. Also use it when the property needs too much work to qualify for traditional financing.
Some investors use both: hard money to acquire and renovate, then refinance into DSCR once the property is rent-ready. This combo maximizes speed upfront and locks in better economics for the long term.
Yes, that's a common strategy. Close fast with hard money, complete renovations, get tenants in place, then refinance to DSCR for long-term financing at lower rates.
Hard money approves more easily since it's asset-based. DSCR requires stronger credit and proven rental income from the property.
DSCR typically needs 620+ credit. Hard money lenders often approve down to 550 or even lower if the deal has enough equity cushion.
DSCR at 8% costs $4,400/month with no points. Hard money at 11% plus 3 points costs $5,500/month plus $18K upfront.
Not usually. DSCR lenders want rent-ready properties. Hard money handles distressed assets that need work before they can generate rental income.