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in Mill Valley, CA
Mill Valley rental investors need financing that works with high property values and limited inventory. DSCR loans qualify you on rental income, while hard money uses property equity as collateral.
Both skip traditional income verification, but they serve different investment strategies. DSCR works for buy-and-hold rental portfolios. Hard money funds quick purchases and heavy renovations.
DSCR loans qualify rental properties based on monthly rent versus monthly mortgage payment. You need a DSCR of 1.0 or higher — meaning rent covers the full payment. Rates run 1-2% above conventional mortgages.
Terms go up to 30 years with 20-25% down payment requirements. This works for Mill Valley landlords holding properties long-term. You skip tax returns and W-2s entirely — the rental income is what matters.
Minimum credit scores typically start at 660. Properties must be investment rentals, not primary residences. Most lenders require 6-12 months of cash reserves to cover mortgage payments.
Hard money loans fund based on property value, not your finances. Lenders look at after-repair value (ARV) for fix-and-flip projects. You can close in 7-14 days versus 30-45 for DSCR loans.
Rates range from 9-14% with terms of 6-24 months. You pay points upfront — typically 2-5% of loan amount. Mill Valley investors use these for auction buys or properties needing major rehab work.
Loan-to-value caps at 65-75% of ARV. Credit matters less than equity and exit strategy. These are bridge loans — you refinance out or sell the property within 12-18 months.
DSCR loans cost less but take longer. Expect 6.5-8.5% rates with 30-day closings. Hard money costs 9-14% but closes in two weeks. You pay for speed and flexibility with higher rates and points.
DSCR requires stable rental income and treats you like a traditional borrower. Hard money treats the property as collateral — your credit score barely matters. If the deal makes sense, hard money funds it.
Hold period separates them clearly. DSCR works for rentals you'll own for years. Hard money finances flips or properties you'll stabilize then refinance. Using hard money for buy-and-hold kills your cash flow with high payments.
Choose DSCR if you're buying a rental property to hold long-term. The property already produces rent or will rent immediately. You want lower payments and can wait 30-45 days to close.
Choose hard money when speed matters or the property needs work. You're flipping it, buying at auction, or planning heavy renovation. You have a clear exit strategy within 12-18 months.
Mill Valley's market moves fast — hard money wins for competitive offers. But high property values mean DSCR's lower rates save significant money over time. Run the numbers on your specific deal timeline and renovation budget.
No. DSCR loans require rental income to qualify, so the property must be rent-ready. Use hard money for properties needing renovation before they can generate rent.
DSCR loans have lower total costs. Hard money charges 2-5 points upfront plus higher rates. DSCR closing costs match conventional loans — about 2-3% of loan amount.
Yes. DSCR loans fund 1-4 unit rentals based on total rental income. Hard money funds any property type if the deal makes sense and exit strategy is clear.
Most lenders require 6-12 months of seasoning before refinancing. Plan your timeline accordingly — rushing a refinance limits your options and may cost more.
DSCR loans require 20-25% down. Hard money typically needs 25-35% down based on after-repair value, not purchase price.