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in Yreka, CA
Yreka investors shopping rental properties face a choice: DSCR loans that underwrite to rent, or hard money that funds fast. Both ignore your W-2 income, but they serve different purposes.
DSCR works for buy-and-hold investors who want long-term rates. Hard money fits fix-and-flip deals where speed matters more than cost. Your exit strategy determines which loan makes sense.
DSCR loans qualify you based on rental income, not your tax returns. The property needs to generate 1.0x to 1.25x its monthly mortgage payment from rent. Most lenders want 15-25% down and credit above 660.
You get 30-year fixed rates similar to conventional loans. Closings take 21-30 days. This works for investors building portfolios in Yreka's rental market, where cash flow matters more than quick flips.
Hard money lenders fund based on the property's after-repair value, not your income or credit. They'll close in 5-10 days and lend up to 75% of purchase price. Rates run 9-14% with 1-3 year terms.
You pay points upfront—typically 2-4% of loan amount. These loans cost more but move fast. Siskiyou County investors use them to grab distressed properties before conventional buyers can close.
DSCR requires the property to generate rent immediately. Hard money doesn't care if it's vacant or trashed. DSCR gives you 30 years to repay. Hard money expects refinance or sale within 12-24 months.
Rate spread matters. DSCR might cost 7-9% depending on credit. Hard money starts at 10% and climbs from there. On a $300K Yreka property, that's $600-900 more per month in interest alone.
Choose DSCR if you're buying a turnkey rental in Yreka to hold long-term. You want predictable payments and don't need to close in a week. The property should already rent or need minimal work to lease.
Pick hard money when you're flipping a foreclosure or buying a distressed property. Speed beats cost when you're competing against cash buyers. Plan your exit—either sell or refinance into DSCR once renovations finish.
Yes, that's common for rehab projects. Fix the property, lease it, then refinance into a 30-year DSCR loan once it's rent-ready and cash-flowing.
Hard money has lower barriers—minimal credit and income checks. DSCR needs better credit (usually 660+) and proof the rent covers the mortgage payment.
Yes. Neither requires you to live in California. DSCR focuses on property income, hard money on property value—your residence doesn't matter.
DSCR typically requires 15-25% down. Hard money lenders want 20-30% down, sometimes more depending on the property's condition and your experience.
Both work for 1-4 unit properties. DSCR handles single-family rentals well. Hard money works for any property type if the numbers make sense.