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in Garden Grove, CA
Garden Grove investors ask me this constantly: DSCR or hard money? The right answer depends on your exit strategy.
Both are asset-based and skip personal income docs. But they serve very different investment moves.
DSCR loans qualify you based on rental income, not your personal income. The property essentially proves itself.
Lenders look at DSCR — the ratio of rental income to monthly debt payment. Hit 1.0 or above and you're in business.
These are 30-year loans. Rates are higher than conventional, but you get real financing — not a bridge.
Hard money lenders care about one thing: the asset. Your credit score and income are secondary.
These loans close fast — sometimes in days. That speed matters when you're competing for a flip in Orange County.
Terms are short, usually 6 to 24 months. Rates are steep. You repay when you sell or refinance.
DSCR loans are long-term financing. Hard money is a short-term tool. Confuse the two and you'll pay for it.
Hard money rates run significantly higher than DSCR rates. You pay for speed and flexibility.
DSCR works on stabilized, rent-ready properties. Hard money handles distressed deals that conventional lenders won't touch.
Buying a Garden Grove rental you plan to hold? DSCR is the move. Get a 30-year loan and let rent service the debt.
Buying a distressed property to flip or rehab? Hard money gets you in fast and funds the renovation.
Some investors use both. Hard money to acquire and renovate, then a DSCR loan to refinance and hold long-term.
No. DSCR lenders want rent-ready properties. Use hard money to buy and rehab, then refinance into a DSCR loan.
Hard money can close in days. DSCR loans typically take 2–4 weeks, similar to conventional.
Neither does. DSCR uses rental income. Hard money focuses almost entirely on the property's value.
DSCR rates run lower than hard money. Hard money charges a premium for speed and flexibility. Rates vary by borrower profile and market conditions.
No. Hard money terms max out around 24 months. It's a bridge, not a permanent hold solution.
DSCR lenders typically want 620–680 minimum. Hard money lenders are more flexible — asset value matters most.