Question 1

Can I use DSCR for a fix-and-flip in East Palo Alto?

Accepted Answer

DSCR requires rental income, so it won't work during construction. Hard money covers acquisition and rehab. Refinance to DSCR once you lease the property if you decide to hold it.

Question 2

Do hard money lenders care about my credit score?

Accepted Answer

Most want 600 minimum, but they weigh equity and exit plan more heavily. Bad credit costs you in rate and points, but it rarely kills the deal if the property math works.

Question 3

Which loan closes faster for a competitive offer?

Accepted Answer

Hard money closes in 7 to 10 days. DSCR takes 3 to 4 weeks. If you're bidding against cash buyers, hard money gives you credibility.

Question 4

Can I get DSCR with less than 20 percent down?

Accepted Answer

Some lenders go to 15 percent down if you have strong credit and a DSCR above 1.25. Expect higher rates and stricter terms at lower down payments.

Question 5

What happens if I can't exit my hard money loan on time?

Accepted Answer

You pay extension fees, usually 1 to 2 points per quarter. If you default, the lender forecloses. Build a backup refinance plan before you take hard money.

DSCR vs Hard Money Loans in East Palo Alto: Which Investor Loan Fits Your Deal?