Loading
in Truckee, CA
Truckee's vacation rental market draws serious investor capital. DSCR loans and hard money loans both skip W-2 income verification, but they serve completely different investment timelines.
DSCR works for cash-flowing properties you plan to hold. Hard money funds quick acquisitions and rehabs when speed matters more than rate. Your strategy determines which one makes sense.
DSCR loans qualify based on rental income divided by mortgage payment. You need a ratio of 1.0 or higher in most cases. The property's revenue drives approval, not your tax returns.
These are 30-year mortgages with rates 1-2 points above conventional. Minimum credit typically sits at 660. You'll put down 20-25% and hold the property long-term to make the numbers work.
Hard money lenders fund based on property value, not income or credit. They close in 7-14 days and charge 8-12% interest with 2-5 points upfront. Terms run 6-24 months because these are bridge loans.
You're paying for speed and flexibility. Credit scores matter less than exit strategy. Most hard money deals involve renovation or quick resale. Expect to put down 10-30% depending on asset quality.
Rate difference runs 4-6 percentage points. DSCR might cost 7.5%, hard money starts at 10% and climbs from there. Hard money adds 2-5 points at closing that DSCR doesn't charge.
Term length matters more than rate if you're flipping. A 12-month hard money loan at 11% beats waiting 45 days for DSCR approval when you're competing for off-market deals. But hold that same property two years and DSCR saves you $30,000 on a $500,000 loan.
DSCR requires stable rental income and appraises as if the property is leased. Hard money doesn't care about current cash flow. They lend on after-repair value for distressed assets DSCR lenders won't touch.
Use DSCR for Truckee vacation rentals you plan to operate long-term. The lower rate matters when you're holding through multiple ski seasons. You need tenants in place or a lease ready to satisfy the debt coverage requirement.
Choose hard money when you're buying distressed cabins to renovate and flip. Speed wins these deals. You're also using hard money if the property needs work that disqualifies it for DSCR until repairs finish.
Some investors start with hard money, complete renovations, then refinance into DSCR once the property stabilizes. That two-step approach costs more upfront but lets you compete on distressed inventory other buyers can't finance.
Yes, many DSCR lenders accept short-term rental income if you provide booking history or market rent analysis. The property must generate enough revenue to cover the mortgage with a 1.0+ ratio.
Most hard money lenders close in 7-14 days once you have a purchase contract. Some can fund in 5 days if the property appraisal comes back clean and title is clear.
DSCR typically requires 660 minimum. Hard money lenders may accept 580-600 or focus entirely on asset value with minimal credit review depending on your down payment.
Yes, this is common for fix-and-flip investors. Complete renovations with hard money, stabilize rental income, then refinance into a lower-rate DSCR loan within 6-12 months.
DSCR usually tops out at 80% LTV. Hard money ranges from 70-90% depending on property condition and your experience, but higher leverage means steeper rates and points.