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in Grass Valley, CA
Grass Valley investors face a clear choice between long-term rental financing and quick flip funding. DSCR loans work when you want rental income to cover the mortgage. Hard money loans work when you need fast capital for fix-and-flip deals.
Both skip W-2 verification, but they serve completely different strategies. One builds rental portfolios. The other fuels renovation projects. Your timeline and exit plan determine which loan makes sense.
DSCR loans qualify you based on rental income divided by mortgage payment. You need a ratio above 1.0, meaning rent covers the debt. Lenders ignore your tax returns and focus purely on the property's ability to pay for itself.
Expect 20-25% down, rates 1-2% above conventional, and 15 to 30-year terms. These loans fit buy-and-hold investors building rental portfolios in Grass Valley's residential neighborhoods. You're not flipping — you're collecting rent checks for years.
Hard money loans fund based on after-repair value, not rental income. Lenders care about the property's potential worth after renovation. You get capital fast — often within 7-14 days — to buy distressed properties other buyers can't touch.
Expect 65-75% loan-to-value, rates from 9-14%, and terms under 24 months. Points and fees run 2-5% upfront. These loans aren't cheap, but speed matters when competing for fixer properties in Nevada County. You're paying for velocity and flexibility.
DSCR loans cost less but take 30-45 days to close. Hard money costs more but closes in under two weeks. DSCR requires the property to already generate rent. Hard money doesn't care if the property is habitable yet.
DSCR rates run 7-9% with low fees. Hard money rates hit 9-14% with significant points. DSCR gives you 30 years to repay. Hard money expects you out in 12-18 months through sale or refinance into permanent financing.
Choose DSCR when you're buying turnkey or lightly improved rentals in Grass Valley. The property must already generate rent or be ready to lease immediately. You plan to hold for years and want the lowest carrying costs while building equity.
Choose hard money when you're buying a fixer that needs significant rehab work. You need capital before the property is habitable. Your exit is selling retail or refinancing into DSCR once renovations finish and rent flows. Time matters more than rate.
No, DSCR lenders need current rental income or market rent on move-in ready properties. Fixers don't qualify until renovations finish and the property can generate immediate rental income.
You face extension fees, higher rates, or foreclosure if you can't exit. Most hard money lenders offer 6-12 month extensions at additional cost, but you need a clear backup plan before closing.
DSCR works better if you have 20% down and buy rent-ready properties. Hard money suits experienced investors who know renovation costs and timelines cold, since mistakes cost you double-digit interest daily.
Yes, this is the standard fix-and-rent strategy. You buy and renovate with hard money, then refinance into DSCR once the property is leased and generating documented rental income.
Neither requires W-2s or tax returns. DSCR qualifies on property income. Hard money qualifies on property value and your exit strategy, not personal earnings.