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in Gustine, CA
Gustine investors have two strong options for non-traditional financing. DSCR loans work for rental income plays, while hard money fits fix-and-flip projects.
Both skip W-2 verification, but they serve completely different strategies. Your timeline and property type determine which one makes sense.
Most borrowers confuse these because they're both called 'investor loans.' The reality: one is for cash flow, the other is for speed.
DSCR loans qualify you based on what the property earns, not what you make. Lenders want a ratio above 1.0, meaning rent covers the mortgage payment plus taxes and insurance.
These come with 30-year terms and rates typically 1-2% above conventional. You need 20-25% down and a 620+ credit score in most cases.
Perfect for buy-and-hold investors building rental portfolios. You can close in 3-4 weeks and finance multiple properties without hitting DTI limits.
Gustine's agricultural worker housing market creates steady rental demand. DSCR loans let you scale without income documentation slowing you down.
Hard money lenders care about one thing: property value and equity. They'll fund 65-75% of current value or after-repair value, whichever is lower.
Rates run 8-12% with 2-4 points upfront. Terms last 6-24 months because these aren't meant to be permanent financing.
You can close in 7-10 days, sometimes faster. Credit matters less than the deal itself and your experience flipping properties.
Use these for distressed properties in Gustine that won't qualify for traditional loans. Speed matters when you're competing against cash buyers.
Timeline separates these immediately. DSCR takes 3-4 weeks, hard money closes in days.
Cost structure is night and day. DSCR runs 1-2% above conventional rates with standard closing costs. Hard money hits you with 8-12% rates plus 2-4 points upfront.
Exit strategy differs completely. DSCR works as permanent financing you keep for years. Hard money forces a refi or sale within months.
Property condition matters more with DSCR. The rental needs to be habitable and appraise properly. Hard money funds tear-downs and major rehabs no other lender will touch.
Choose DSCR if you're buying a rental property in move-in condition. You want long-term financing and predictable payments while building equity.
Go hard money when you're flipping or doing heavy renovation. You need fast funding and the property won't pass traditional appraisal.
Gustine's market includes both opportunities. Rental properties near the agricultural employers work for DSCR. Dated homes needing full rehabs fit hard money.
Some investors use hard money to acquire and renovate, then refinance into DSCR once the property is rent-ready. That's a legitimate strategy if the numbers work.
No, DSCR loans require rental income to qualify. You need a tenant-ready property generating rent to meet the debt service coverage ratio requirement.
Most hard money lenders close in 7-10 days once you have a purchase contract. Some can move faster if you have all documentation ready.
DSCR loans cost less over time with lower rates and no points. Hard money is expensive but necessary when speed or property condition rules out DSCR.
DSCR typically requires 20-25% down. Hard money lenders fund 65-75% LTV, meaning you need 25-35% down depending on the deal.
Yes, that's a common strategy. Complete renovations, get a tenant in place, then refinance to DSCR for permanent financing at lower rates.