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in Novato, CA
Novato investor properties demand different financing than owner-occupied homes. DSCR loans and hard money serve opposite ends of the investment spectrum.
DSCR works for cash-flowing rentals you plan to hold. Hard money funds quick acquisitions and rehabs. Your exit strategy determines which loan makes sense.
DSCR loans qualify you based on the property's rental income, not your W-2 or tax returns. If the rent covers the mortgage payment by at least 1.0x to 1.25x, you're approved.
Terms run 30 years fixed or adjustable. Rates sit 1.5% to 3% above conventional. You need 20% to 25% down and a 620+ credit score.
This works for established rental properties generating stable income. Novato's steady rental demand makes DSCR viable for single-family and small multifamily investments.
Hard money lenders fund based on the property's current or after-repair value. Your credit and income matter less than the deal's numbers and your exit plan.
Terms run 6 to 24 months. Rates range from 8% to 12% with 2 to 5 points upfront. You typically need 10% to 30% down depending on the project.
These loans close in days, not weeks. That speed costs money but lets you compete with cash buyers in competitive Novato neighborhoods.
DSCR gives you long-term financing at lower rates. Hard money gives you short-term capital at premium rates. DSCR requires a performing asset. Hard money funds non-performing or distressed properties.
DSCR takes 25 to 35 days to close. Hard money closes in 7 to 14 days. DSCR costs less monthly but needs higher credit. Hard money costs more but accepts lower credit scores.
Most investors use hard money first to acquire and renovate, then refinance into DSCR for the long hold. You're paying for speed and flexibility upfront, then locking in stable financing.
Choose DSCR if you're buying a turnkey rental that's already generating income. You want long-term financing and can wait 30 days to close. Your credit sits above 620.
Choose hard money if you're buying distressed property, flipping, or need to close fast. You have a clear exit in 12 months or less. Speed matters more than rate.
Novato's limited inventory means speed wins deals. Hard money lets you move fast, then you refinance into DSCR once the property's stabilized and rented.
Most DSCR lenders require the property to be rent-ready. If it needs work, start with hard money to fund repairs, then refinance into DSCR.
Most hard money loans close in 7 to 14 days. Some lenders can fund in 5 days if you have all documents ready.
Hard money lenders typically accept 600+ credit scores. Some go lower if the deal and down payment are strong enough.
Yes, most investors refinance from hard money into DSCR once renovations are done and the property generates rental income. This is standard strategy.
DSCR loans have much lower monthly payments due to 30-year terms and lower rates. Hard money payments are higher but temporary.