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in San Anselmo, CA
San Anselmo investors face a choice: DSCR loans for rental cash flow or hard money for quick flips. Both skip W-2 income checks, but the similarities end there.
DSCR loans work when the property pays for itself. Hard money works when you need speed or the property needs heavy work before it can cash flow.
Most San Anselmo investors use DSCR for long-term holds and hard money for renovation projects. Your timeline and property condition determine which path makes sense.
DSCR loans qualify you based on rental income divided by mortgage payment. Lenders want a ratio above 1.0, meaning rent covers the full payment.
Terms run 30 years with rates 1-2% above conventional mortgages. You need 20-25% down and a 620+ credit score in most cases.
These loans work for properties already rented or ready to rent immediately. Lenders use market rents if the property sits vacant at closing.
DSCR loans close in 3-4 weeks. They beat hard money on rate and term, but they require the property to generate income from day one.
Hard money loans fund based on property value, not income or credit. Lenders care about the asset and your exit strategy, nothing else.
Rates run 9-12% with 2-3 points upfront. Terms max out at 12-24 months because these loans exist to get you to permanent financing or a sale.
You can close in 7-10 days with minimal paperwork. Hard money funds properties that need major work or won't qualify for traditional financing yet.
Most hard money lenders fund 65-75% of purchase price or after-repair value. You bring more cash upfront but gain speed and flexibility.
Rate spread tells the story: DSCR runs 7-8%, hard money runs 10-12%. That 3-4% difference costs thousands monthly on a San Anselmo property.
DSCR needs the property to cash flow now. Hard money doesn't care if the property generates zero income today, as long as your exit makes sense.
Term length separates long-term holds from short-term projects. DSCR gives you 30 years to build equity. Hard money gives you 12-18 months to execute and refinance.
Credit matters for DSCR but barely registers for hard money. A 580 score kills most DSCR deals but won't stop a hard money lender if the asset checks out.
Use DSCR when you're buying a turnkey rental or a property that needs minor cosmetic work. The lower rate and long term make it ideal for building a rental portfolio.
Use hard money when you're buying a fixer in San Anselmo that needs major renovation before tenants move in. Speed and flexibility beat rate when the property can't generate income yet.
Most investors use both at different stages. Hard money funds the purchase and renovation, then you refinance into DSCR once the property rents and stabilizes.
Don't try to force DSCR on a heavy rehab project. The property won't qualify until renovations finish, and most DSCR lenders won't wait while you gut and rebuild.
Yes, most San Anselmo investors do exactly that. You finish renovations, place a tenant, then refinance to DSCR for long-term hold financing.
Hard money closes in 7-10 days. DSCR takes 3-4 weeks because lenders verify rent potential and run full appraisals.
Yes, but hard money often accepts broker price opinions to save time. DSCR requires a full appraisal showing rental income potential.
No, DSCR lenders expect long-term rental strategy. Hard money exists specifically for short-term flip projects with quick exits.
DSCR has standard 2-3% closing costs. Hard money adds 2-3 points upfront, making it 4-6% total to close the deal.