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in Manteca, CA
Manteca investors typically face a choice between DSCR loans for rental holds and hard money for quick flips. Both skip traditional income verification, but they serve completely different investment strategies.
DSCR loans work for cash-flowing rentals you plan to keep. Hard money funds fast purchases and rehabs you'll exit within months. Your timeline and property condition determine which one makes sense.
DSCR loans qualify you based on rental income, not your tax returns. If the property generates enough rent to cover the mortgage by a 1.0-1.25x ratio, you're approved regardless of your W-2 or business income.
These loans carry rates typically 1-2% above conventional, with 30-year terms standard. You need 20-25% down and a 620+ credit score. They work best for stabilized rentals that already have tenants or can rent immediately.
Hard money loans fund based on the property's after-repair value, not income ratios. Lenders care about your exit strategy and equity position. Approval happens in days, not weeks.
Expect rates between 9-14% with 6-24 month terms. Most lenders require 20-30% down but can close in under two weeks. You pay origination points of 2-4%. These loans make sense when speed matters more than rate.
The biggest split is timeline. DSCR loans are long-term financing for properties you'll hold years. Hard money bridges you through a 6-12 month flip or renovation before you sell or refinance out.
Cost structure differs completely. DSCR loans have lower rates but stricter rental income requirements. Hard money costs more monthly but approves properties DSCR lenders won't touch—vacant homes, major rehabs, or deals needing fast closes against cash buyers.
Choose DSCR if you're buying a rental that's already habitable and you plan to keep it. The property must generate enough rent to hit lender ratios, usually $1.00-$1.25 in rent per dollar of mortgage payment.
Use hard money for anything requiring speed or major work. Buying at foreclosure auction? Competing against cash offers? Gutting a distressed property? Hard money gets you to closing fast. Then refinance to DSCR once renovations finish and you have a tenant in place.
Yes, this is a common strategy. Complete renovations, place a tenant, then refinance to a lower DSCR rate for long-term holding.
Hard money approves in 1-3 days. DSCR loans take 3-4 weeks but offer much better rates and terms.
DSCR loans cover 1-4 units easily. Hard money lenders vary—some fund small multifamily, others stick to single-family only.
DSCR lenders want 620 minimum. Hard money lenders care less about credit, focusing instead on equity and exit strategy.
No. DSCR requires full appraisals. Hard money uses broker price opinions or appraisals to determine after-repair value.