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in Westlake Village, CA
Westlake Village investors buying rental properties or fix-and-flip deals often face the same choice: DSCR or hard money. Both skip the W-2 requirement, but they serve completely different investment timelines.
DSCR loans work for long-term rental holdings with stable cash flow. Hard money fits short-term flips and rehabs where speed beats cost. Your exit strategy determines which makes sense.
DSCR loans qualify you based on a property's rental income, not your tax returns. The lender divides monthly rent by the monthly mortgage payment to calculate your debt service coverage ratio. Most want to see 1.0 or higher.
You'll get 30-year fixed terms with rates typically 1-2% above conventional loans. These work for single-family rentals, multi-family buildings, and short-term vacation properties that generate consistent income.
Hard money lenders care about one thing: the property's after-repair value. They'll fund based on what the home will be worth after you finish the work, not your credit score or income. Approvals happen in days, not weeks.
Terms run 6-24 months with interest-only payments and rates between 8-15%. Expect points upfront—typically 2-5% of the loan amount. Speed and flexibility cost more, but that's the trade for closing fast on distressed properties.
DSCR loans underwrite the rental income stream. Hard money underwrites the deal itself—purchase price versus ARV. DSCR wants to see rent cover the mortgage. Hard money wants to see equity in the flip.
DSCR terms stretch 30 years with lower rates but stricter cash flow requirements. Hard money gives you 12 months on average with higher rates but funds properties that don't cash flow yet. One's a mortgage, the other's bridge financing.
Choose DSCR if you're buying a Westlake Village rental to hold long-term and the property already generates income or will once occupied. You need 20-25% down and a rental appraisal showing the property covers its debt service.
Choose hard money if you're buying a distressed property to renovate and resell within 12 months. You need a clear exit—either a sale or refinance into permanent financing—and enough equity to justify the higher cost of capital.
Not until it's rent-ready. DSCR requires a rental appraisal showing current or market rent. Use hard money for the renovation, then refinance to DSCR once it's leased.
Hard money closes in 5-10 days typically. DSCR takes 3-4 weeks since lenders need rental comps and full appraisals, not just ARV estimates.
Yes. DSCR qualifies on property income, hard money on asset value. Neither requires W-2s or tax returns for approval.
That's the standard play. Finish the rehab, lease the property, then refinance into a DSCR loan with better terms and lock in your rental income.
DSCR typically wants 20-25% down. Hard money varies by deal but expect 15-30% depending on your experience and the property's condition.