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in Montclair, CA
Montclair investors ask us this constantly: DSCR or hard money? Both are non-QM tools. They solve very different problems.
DSCR fits long-term rental holds. Hard money fits fast acquisitions and flips. Picking wrong costs you time and money.
DSCR loans qualify based on rental income, not your tax returns. If the property cash flows, you can get approved.
Lenders look at one ratio: monthly rent divided by monthly debt payment. Hit 1.0 or above and you're in the game.
These are 30-year products. You get a real mortgage with a fixed rate — not a short-term bridge you need to refinance out of.
Hard money lenders care about one thing: the asset. Your credit score matters less than the deal itself.
Terms are short — typically 6 to 24 months. Rates run higher. You pay for speed and flexibility.
These loans close fast. That's the point. In a competitive Montclair market, closing in days beats closing in weeks.
DSCR rates are lower and terms are longer. Hard money rates are higher — you're paying for speed and fewer requirements.
DSCR requires a stabilized, rentable property. Hard money works on distressed properties that no conventional lender will touch.
Exit strategy matters. DSCR is the exit. Hard money is the entry — most investors refinance into a DSCR loan after rehab.
Buying a turnkey rental in Montclair? Use DSCR. The property earns income on day one and you want long-term financing.
Buying a distressed property at a discount to renovate and flip — or to rent after rehab? Hard money gets you in the door fast.
Many investors use both in sequence. Hard money to buy and fix, then DSCR to refinance and hold. We structure that two-step often.
Not usually. DSCR lenders want a rent-ready property. Distressed deals need hard money first, then a DSCR refinance after repairs.
Hard money can close in 5–10 days. DSCR loans typically take 3–4 weeks. Speed is hard money's main advantage.
Neither requires traditional income docs. DSCR uses rental income. Hard money focuses on property value and your exit plan.
DSCR lenders typically want 640–680 minimum. Hard money lenders are more flexible — some approve below 600 based on the deal.
Yes, and we do this regularly. Once the property is stabilized and rented, a DSCR refi replaces the short-term hard money loan.
DSCR rates are consistently lower than hard money. Rates vary by borrower profile and market conditions for both products.