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in Woodlake, CA
Woodlake investors usually face this choice: DSCR loans for rental income plays or hard money for quick flips. Both skip W-2 verification, but they serve completely different timelines and strategies.
DSCR loans work when you're buying to hold and rent. Hard money makes sense when you need fast cash to close or renovate. The wrong choice costs thousands in wasted fees and missed opportunities.
DSCR loans qualify you based on the property's rental income, not your tax returns or pay stubs. If the monthly rent covers 1.0x to 1.25x the mortgage payment, you're approved. This works for investors who show low personal income on paper.
You get 30-year fixed terms at rates typically 1-2% higher than conventional loans. Down payments start at 20% for single-family properties in Woodlake. Credit scores need to be 620 minimum, though 680+ gets better pricing.
Hard money loans fund in days, not weeks. Lenders base approval on the property's after-repair value and your equity position. If you're buying a distressed property in Woodlake that needs work before it qualifies for traditional financing, this is your path.
Expect 8-12% interest rates and 2-5 points in origination fees. Terms run 6-24 months because these are bridge loans, not permanent financing. You need a clear exit: refinance into DSCR or conventional once renovations finish, or sell the property.
Timeline separates these loans immediately. DSCR takes 20-30 days to close because underwriters verify rent comps and review full appraisals. Hard money closes before most conventional loans even get an appraisal ordered.
Cost structure flips between them. DSCR has lower rates but requires full documentation of the rental income potential. Hard money charges double the interest but skips most paperwork. One is cheap money you hold long-term, the other is expensive money you use briefly.
Use DSCR when you're buying a rental that's already rent-ready or needs minor cosmetic work. The property must generate enough rent to cover the mortgage from day one. This works for small multifamily properties or single-family homes in Woodlake's established neighborhoods.
Choose hard money when the property won't qualify for any other loan yet. Maybe it's condemned, needs a new roof, or requires foundation work. You're planning to renovate and either flip or refinance within 12 months. Speed matters more than rate when you're competing against cash buyers.
No. DSCR lenders require the property to be rentable at closing. If it needs significant work, start with hard money, complete renovations, then refinance into DSCR.
Hard money is easier if you have equity or a down payment. DSCR is easier if the property cash flows well but requires better credit scores.
DSCR typically requires 620-680 minimum. Hard money lenders care more about your equity position and may approve scores in the 500s with larger down payments.
Yes, this is the standard exit strategy. Once renovations finish and the property appraises, refinance into a DSCR loan with lower rates and longer terms.
DSCR has lower fees overall. Hard money charges 2-5 points upfront plus higher interest, but you pay it for a shorter period if your exit plan works.