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in Weed, CA
Weed's rental market attracts investors who need financing without W-2 income verification. Both DSCR and hard money loans skip tax returns, but they serve different purposes.
DSCR loans work for cash-flowing rentals you plan to hold. Hard money fits fix-and-flip deals or properties that need work before they can qualify for traditional financing.
DSCR loans approve based on whether the rental income covers the mortgage payment. You need a DSCR of 1.0 or higher—meaning rent equals or exceeds the monthly payment.
These are 30-year mortgages with rates typically 1-2% above conventional. Expect 20-25% down and at least 620 credit. No tax returns, no employment letters—just rental income analysis.
You can close in 15-20 days once appraisal and title clear. The property must be rentable at closing, so major rehabs don't qualify until work is done.
Hard money loans fund fast—often within 7-10 days. They're secured by property value, not income or credit. Lenders care about the deal itself and your exit strategy.
Expect 10-12% rates and 2-4 points at closing. Terms run 6-24 months, not 30 years. You're paying for speed and flexibility, not long-term affordability.
These loans shine for properties that need rehab before they qualify for DSCR or conventional financing. You buy with hard money, fix it up, then refinance into permanent debt.
Rate difference is stark: DSCR might cost 7-8%, hard money runs 10-12%. But hard money closes in a week while DSCR takes three. Pick based on your timeline and hold strategy.
DSCR requires the property to be rent-ready and cash-flowing. Hard money doesn't care—it funds based on after-repair value. If you're buying a fixer, hard money is often your only option.
Down payment requirements differ too. DSCR asks for 20-25% of purchase price. Hard money might require 25-35%, depending on the lender's risk assessment and your track record.
Choose DSCR if you're buying a turnkey rental in Weed that's already generating income. You want the lower rate and longer term because you plan to hold the property for years.
Choose hard money if the property needs work, you're flipping it, or you need to close in under two weeks. You'll refinance out within 12 months, so the higher rate matters less than speed and approval certainty.
Most Weed investors use both at different times. Hard money to acquire and renovate, then DSCR or conventional to refinance into permanent financing once the property is stabilized.
Depends on whether it's rentable as-is. Cosmetic updates are usually fine, but properties requiring major systems work won't qualify until repairs are complete.
Most hard money loans run 12 months with options to extend. Plan your rehab and refinance timeline carefully to avoid extension fees.
DSCR lenders typically want 6-12 months reserves. Hard money lenders focus more on equity and exit strategy than cash reserves.
Yes, but you'll refinance into DSCR or conventional once renovations finish. Holding hard money long-term costs too much in interest.
Hard money has looser credit requirements but needs more equity. DSCR requires better credit but accepts lower down payments on strong cash-flowing properties.