Question 1

Can I use DSCR loans for fix-and-flip projects?

Accepted Answer

No. DSCR loans require rental income, which you won't have during renovation. Hard money fits flips because it's based on after-repair value, not current rent.

Question 2

How long does each loan take to close?

Accepted Answer

Hard money closes in 7-14 days. DSCR takes 3-4 weeks because lenders review rent rolls and appraisals more carefully.

Question 3

Which loan has lower upfront costs?

Accepted Answer

DSCR typically has lower points at closing. Hard money charges 2-5 points plus higher interest, but you repay faster so total cost depends on your timeline.

Question 4

Do I need reserves for either loan?

Accepted Answer

Yes. DSCR lenders want 6-12 months of reserves. Hard money lenders care more about your renovation budget and exit plan than cash reserves.

Question 5

Can I refinance hard money into DSCR later?

Accepted Answer

Absolutely. Many Rocklin investors use hard money to acquire, then refinance to DSCR once the property is rented and stabilized. That's a common strategy.

DSCR vs Hard Money Loans for Rocklin Investment Properties