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in Cotati, CA
Cotati investors have two fast paths to financing rental properties without showing W-2 income. DSCR loans use your property's rent to qualify. Hard money lenders focus purely on the asset.
Both options skip traditional income verification. The right choice depends on whether you're buying a turnkey rental or a fixer that needs work before it can cash flow.
DSCR loans qualify based on a property's rental income divided by its debt payments. You need a ratio above 1.0 in most cases. Rates run 1-2% above conventional loans.
These work for properties already rented or ready to rent immediately. Terms stretch 30 years with fixed or adjustable rates. Credit scores start at 620, though 680+ gets better pricing.
Hard money lenders fund based on property value after repairs, not current condition. They close in 5-10 days when speed matters. Rates run 9-14% with points upfront.
Terms last 6-24 months max. You refinance or sell once the property stabilizes. Most lenders go to 70-75% of after-repair value, funding both purchase and renovation costs.
DSCR loans cost less and last longer but need stabilized rental income. Hard money costs more but closes faster and funds properties that can't generate rent yet.
A turnkey duplex in Cotati gets DSCR financing at 7-8%. A condemned Victorian needing six months of work needs hard money at 11% for the acquisition and renovation, then refinances to DSCR once rented.
Choose DSCR if you're buying a property already rented or needing only cosmetic updates. The lower rate and long term make sense when cash flow starts immediately.
Pick hard money when you need speed or the property needs major work before tenants move in. Plan your refinance to DSCR or sale before the 12-24 month term ends. Most Cotati investors use hard money for acquisition and heavy rehab, then refinance to DSCR once stabilized.
Only if repairs are cosmetic and it can rent immediately. Major work that prevents occupancy requires hard money first, then refinance to DSCR.
Most hard money lenders close in 5-10 days once you have a signed purchase contract. Some do 72-hour closings for an additional fee.
DSCR lenders want 620 minimum, 680+ for best rates. Hard money focuses on the asset, so many approve with scores in the 500s.
Yes, that's the standard exit strategy. Once renovations finish and you have a signed lease, refinance to DSCR for long-term cash flow.
Neither offers low-down options. DSCR needs 20-25% down. Hard money typically lends 70-75% of after-repair value including renovation costs.