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in Dorris, CA
Both DSCR and hard money loans skip W-2 income verification, making them popular with Dorris investors. The difference is timing: DSCR loans work for cash-flowing rentals you plan to hold, while hard money funds quick acquisitions and rehabs.
Most Dorris investors use hard money for fix-and-flips, then refinance into DSCR loans for long-term holds. Understanding which loan fits your strategy determines whether you pay 7% for 30 years or 12% for 12 months.
DSCR loans qualify you based on the property's rent, not your tax returns. Lenders want the monthly rent to cover 1.0x to 1.25x the mortgage payment, depending on the program.
These are 30-year fixed loans with rates typically 1-2% above conventional mortgages. You need 20-25% down, a 620+ credit score, and a property that rents well enough to meet the DSCR requirement.
DSCR works for established rental properties in Dorris where you can document current or projected rent. It does not work for properties needing major renovation before they can be rented.
Hard money loans fund based on the property's after-repair value, not your income or credit. Approval happens in days, and you can close in under two weeks on distressed Dorris properties.
Expect 10-14% interest rates, 2-4 points upfront, and 6-12 month terms. Lenders typically fund 70-80% of purchase price or 80-90% of purchase plus rehab costs combined.
You exit by selling the property, refinancing into a DSCR or conventional loan, or paying off the loan with other capital. Hard money is expensive, so you need a clear exit plan before closing.
DSCR loans charge 7-9% for 30 years and require stable rental income. Hard money charges 10-14% for 6-12 months and funds based on future property value after repairs.
DSCR underwriting takes 3-4 weeks because lenders order appraisals and verify rent comps. Hard money can fund in 7-10 days because approval is based on your equity and exit strategy, not property cash flow.
On a $300k Dorris rental, DSCR costs about $2,100/month at 7.5% fixed. The same property with hard money costs $3,000/month at 12%, but you only carry that cost during renovation before refinancing out.
Use hard money when you're acquiring a distressed Dorris property that needs work before it can rent or sell. Use DSCR when you're buying a rental-ready property or refinancing out of hard money after renovations.
If the property already generates rent and you plan to hold it, DSCR is cheaper and locks in fixed payments. If you need fast funding for a flip or heavy rehab, hard money gets you in the door quickly despite higher costs.
Many Dorris investors keep both options open. They use hard money for acquisitions, renovate within 6 months, then refinance into DSCR loans to hold as long-term rentals with lower fixed payments.
Yes, this is the standard exit strategy. Once renovations are done and the property rents, you refinance into a 30-year DSCR loan at a lower rate.
Hard money approves faster with lower credit requirements. DSCR has stricter credit and income rules but offers better long-term rates.
Yes. Neither loan requires you to live in California or provide W-2 income, making both accessible for remote investors.
Hard money often approves with 580-600 credit. DSCR loans typically require 620 minimum, with better rates at 680+.
No. DSCR loans require rental income and are designed for buy-and-hold investors, not flippers needing short-term bridge financing.