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in Porterville, CA
Porterville investors typically need one of two financing routes: DSCR loans for rental properties or hard money for fix-and-flip deals. Both skip traditional income verification, but they serve completely different strategies.
DSCR loans work like conventional mortgages with 30-year terms and rates in the 7-9% range. Hard money gets you cash fast for 6-24 months at 9-14% but costs more upfront.
DSCR loans underwrite your rental property's cash flow instead of your tax returns. Lenders want rent income to cover 1.0-1.25x the mortgage payment. No pay stubs, no DTI calculations.
You get 30-year fixed or ARM options with 20-25% down. Rates run 1-2% higher than conventional but approval is simpler. Works for single-family, multi-unit, and small apartment buildings across Tulare County.
Hard money lenders fund based on after-repair value, not current condition. They lend 65-75% of ARV, giving you capital to buy and renovate distressed properties. Approval takes 3-7 days instead of 30-45.
Terms run 6-24 months with rates around 9-14% plus 2-4 points upfront. You pay interest-only monthly, then refinance or sell when the project is done. Most lenders cap loans at 70% loan-to-cost on the purchase and rehab combined.
DSCR loans cost less over time but require stabilized rent and longer timelines. Hard money costs more but closes in days and funds properties that need work. DSCR rates are 7-9%, hard money runs 9-14%.
DSCR needs the property to already generate rental income. Hard money works on vacant or uninhabitable properties. If you're buying a rental ready to lease, use DSCR. If you're buying a distressed property in Porterville to renovate, you need hard money.
Use DSCR when you're buying turnkey rentals or properties with tenants in place. You want the lower rate and 30-year amortization because you're holding long-term. Most Porterville single-family and duplex investors use DSCR loans.
Use hard money when you're flipping houses or doing heavy rehabs that will take 6-12 months. Speed matters more than cost. You'll refinance into DSCR or conventional once the work is done, or sell and pay off the loan.
Only if it's currently rentable and generating income. Lenders underwrite existing rent, so the property needs tenants or be ready to lease immediately.
DSCR lenders typically want 660-680 minimum. Hard money lenders care less about credit and focus on equity and exit strategy, often approving scores as low as 600.
Hard money closes in 3-7 days. DSCR loans take 21-30 days like conventional mortgages since they require appraisals and more documentation.
Yes, that's the standard strategy. Fix the property, get it rented, then refinance into a DSCR loan with a lower rate and long-term amortization.
DSCR loans are better for stabilized duplexes and fourplexes. Hard money works if you're buying a distressed multi-unit to renovate and stabilize first.