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West Covina sits in a sweet spot for LA County investors—lower entry costs than coastal markets but strong rental demand from San Gabriel Valley families and commuters. Single-family homes and small multifamily properties dominate here, not luxury condos.
Most investors target 3-bedroom houses near the 10 Freeway or close to Los Angeles County + USC Medical Center workers. Cash flow beats appreciation in this market, which makes loan structure critical.
You won't compete with as many institutional buyers here as in Pasadena or downtown LA. That gives smaller investors better odds at winning deals without waiving contingencies.
Traditional investor loans require 15-25% down, 620+ credit, and proof the property cash flows. But most West Covina investors I work with use DSCR loans that skip personal income verification entirely.
DSCR lenders only care if rent covers the mortgage payment—usually a 1.0 to 1.25 ratio depending on property type. No W-2s, no tax returns, no employment letters.
You can close in an LLC from day one with DSCR financing. That protects personal assets and simplifies bookkeeping when you scale to multiple properties.
Fix-and-flip buyers need different products—hard money or bridge loans with 12-24 month terms. Those require 20-30% down but fund in days, not weeks.
About 40 of the 200+ lenders we access will touch investor properties in West Covina. The rest stick to owner-occupied or won't go near LA County at all.
DSCR rates run 1-2% higher than conventional loans—call it 7.5-9% depending on credit and down payment. That spread tightens if you put 30% down instead of 20%.
Hard money costs more—10-13% with 2-3 points upfront—but you're paying for speed and flexibility. Some lenders fund the rehab budget in draws as work completes.
Portfolio lenders who keep loans in-house offer the most creative structures. I've closed deals with interest-only payments, extended terms, and even cross-collateralization across multiple properties.
West Covina investors make three big mistakes: underestimating property taxes, ignoring HOA restrictions on rentals, and assuming every property cash flows at 20% down.
Run your numbers at 25% down minimum. LA County property taxes reassess on purchase, and insurance costs have spiked 30-40% in two years. Your 2019 spreadsheet assumptions are dead.
Most HOAs here allow rentals, but some require board approval or cap the percentage of units that can be rented. Check CC&Rs before you write an offer—I've seen deals fall apart at this step.
DSCR loans use projected rent, not actual collected rent. Get a rent schedule from a licensed appraiser, not Zillow estimates. Lenders won't accept your optimistic numbers.
DSCR loans work for buy-and-hold investors who want long-term financing without income documentation. Hard money fits flippers who need fast closings and plan to refinance or sell within a year.
Bridge loans fill the gap when you're buying a new property before selling another. Interest-only options reduce monthly payments but require strong exit strategies.
Conventional investor loans beat DSCR on rate—sometimes by 1.5 points—but the income documentation kills deals for self-employed investors or those with multiple properties. Most choose DSCR despite the cost.
West Covina's rent-to-price ratio works better than most LA County cities. You can still find 3-bed houses under $700K that rent for $3,200-3,500—that pencils at 25% down with DSCR.
Target neighborhoods near good school districts or close to employment centers. Properties within a mile of Eastland Center or along Azusa Avenue stay rented with less turnover.
LA County requires rental property registration and regular inspections in some cities. West Covina has lighter touch than LA city limits, but factor compliance costs into your budget.
Rehab costs run higher than Inland Empire but lower than coastal markets. Budget $50-75 per square foot for updates—flooring, paint, kitchens, and baths move the needle most for rent bumps.
No. DSCR loans require the property to generate rental income immediately. Flips need hard money or bridge loans with 12-24 month terms designed for rehab and resale.
DSCR lenders typically require 620-640 minimum, though 680+ gets better rates. Hard money lenders care more about deal equity than credit and may go lower.
DSCR loans have no hard limit—I've closed loans for investors with 15+ properties. Conventional investor loans cap at 10 financed properties including your primary residence.
Yes. Most lenders require 6 months PITI reserves per property financed. So if you own three rentals, you need 18 months total reserves across all properties.
DSCR and hard money lenders allow LLC closings from day one. Conventional investor loans require individual names, though you can transfer to an LLC after closing.
DSCR loans start at 20% down but expect better rates at 25-30%. Hard money typically requires 25-35% depending on the deal and your experience level.
Investor Loans in West Covina