Loading
in Dos Palos, CA
Dos Palos investors face a choice: finance based on rental income or asset value. Both DSCR and hard money loans skip traditional income verification, but they serve completely different investment timelines.
DSCR loans work for buy-and-hold investors who want stable, long-term financing. Hard money fits fix-and-flip projects or properties that need work before they can qualify for conventional financing.
DSCR loans qualify you based on whether rent covers the mortgage payment. Lenders calculate a ratio: monthly rent divided by monthly debt. A ratio above 1.0 means the property pays for itself.
These are 15-30 year mortgages with rates typically 1-2% above conventional loans. You need 20-25% down and a 620+ credit score. No tax returns, no pay stubs—just the property's rental income.
Hard money lenders care about one thing: the property's current and future value. They'll fund quickly—sometimes in days—based on equity, not income or credit. Rates run 8-12%+ with 2-5 points upfront.
These are bridge loans, usually 6-24 months. You pay interest-only and refinance or sell before the term ends. Expect 65-75% LTV on purchase price or after-repair value.
Timeline separates these loans more than anything. DSCR takes 3-4 weeks to close and keeps you financed for decades. Hard money closes in under a week but forces a refinance or sale within two years.
Cost structure flips too. DSCR has lower rates but stricter underwriting on the property's condition and rent potential. Hard money costs more but will fund deals other lenders reject—including major rehabs and properties with deferred maintenance.
Choose DSCR if you're buying a rental that's already habitable and will cash flow immediately. You want long-term financing at reasonable rates without showing tax returns. Most Dos Palos buy-and-hold investors use DSCR loans.
Pick hard money if you're flipping a fixer or buying a property that won't qualify for traditional financing yet. You need speed and will refinance once renovations finish. Factor in the higher cost—it only makes sense if your project profit covers the premium.
Yes, that's the most common exit strategy. Once repairs finish and you have a tenant, you refinance into a DSCR loan at much lower rates.
Hard money closes in 3-7 days. DSCR loans take 3-4 weeks because lenders order appraisals and verify rental income through leases or market rent analysis.
DSCR lenders require standard appraisals showing habitable condition. Hard money lenders often inspect themselves and will fund properties that need major work.
DSCR loans need 620+ credit scores. Hard money lenders care more about equity and may approve borrowers with lower scores or recent credit events.
No. Both are strictly for investment properties. DSCR requires rental income, and hard money lenders only fund investor projects.