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in Santee, CA
Santee investors chase two types of deals: long-term rentals and quick flip projects. DSCR loans fund rental properties based on cash flow. Hard money finances fast acquisitions and renovations.
Both skip W-2 income verification, but the timelines and costs differ dramatically. Pick the wrong one and you'll pay thousands extra or miss your closing window entirely.
DSCR loans qualify based on your property's rental income divided by its debt payments. If the property generates $3,000 monthly and the mortgage costs $2,400, you have a 1.25 DSCR. Most lenders want 1.0 or higher.
These are long-term mortgages with 30-year amortization. Rates run 1-2% above conventional loans. You can expect 20-25% down and a 30-45 day closing timeline.
Hard money lenders base approval on the property's value and equity position, not income or credit. They'll loan 65-75% of the after-repair value. These are bridge loans meant for 6-24 months, not permanent financing.
Rates start at 9-12% with 2-4 points upfront. You can close in 5-10 days when speed matters. Most borrowers refinance into conventional or DSCR loans once renovations finish.
DSCR loans cost less but take longer. Hard money costs more but moves fast. A DSCR loan at 7.5% saves you $15,000 annually versus hard money at 11% on a $400,000 loan.
DSCR requires the property to already cash flow with tenants in place. Hard money works on vacant properties needing major work. DSCR needs appraisals and full underwriting. Hard money skips most of that.
Use DSCR when buying turnkey rentals or stabilized properties with tenants already paying rent. You'll save thousands in interest over the loan term. Choose hard money when competing against cash buyers or funding a gut renovation that can't show rental income yet.
Many Santee investors use both strategically. Hard money closes the purchase and funds the rehab. Six months later, they refinance into a DSCR loan once tenants are in place and the property appraises higher.
No. DSCR loans require the property to generate rental income at closing. If it needs major repairs or lacks tenants, hard money is your option until it's rent-ready.
DSCR loans typically require 660+ credit scores. Hard money lenders care less about credit and more about equity, often approving scores in the 500s.
DSCR loans go up to $3 million on investment properties. Hard money typically caps at $2 million and lends 65-75% of after-repair value.
DSCR lenders want 6-12 months of reserves per property. Hard money lenders focus on equity position and may not require reserves at all.
Yes. DSCR loans have no limit on financed properties since they qualify each property independently. Hard money depends on the lender's risk appetite.