Every guide on California Private Money Loan — Fast-Close Bridge, ADU Value-Add & Coastal Fix-and-Flip Financing opens with a Bottom-Line-Up-Front (BLUF) formula and pairs directly with an interactive calculator workbench so you can stress-test your exact rent, PITIA, and leverage numbers.
For 1–4 unit residential investment properties, DSCR equals Gross Monthly Rent (the lesser of the executed lease or Appraiser Form 1007 market rent, or 100% of Form 1007 on vacant purchases/STRs) divided by Monthly PITIA (Principal + Interest + Property Taxes + Landlord Hazard/Flood/Wind Insurance + HOA Dues). A 1.00x DSCR means rent exactly covers PITIA; 1.20x+ unlocks Tier-1 par wholesale pricing.
Because 1–4 unit DSCR underwriting divides gross rent by PITIA alone, it excludes property management (8%–10%), CapEx/maintenance reserves (5%–8%), and economic vacancy (5%). A property typically needs a 1.22x–1.28x gross DSCR to generate positive net distributable cash flow after operating expenses.
When property values are high relative to rent, your maximum loan amount is constrained by DSCR rather than LTV. To size a DSCR-constrained loan: (1) divide Monthly Gross Rent by the lender’s minimum DSCR (e.g., 1.00x or 1.15x) to find Max Allowable PITIA, (2) subtract monthly Taxes, Insurance, and HOA to isolate Max Monthly P&I, and (3) discount Max P&I at the note rate over 360 months.
Wholesale STR DSCR lenders accept three income documentation paths: (1) AirDNA Rentalizer market projections (for new acquisitions and conversions), (2) trailing 12-month Airbnb/VRBO/direct-booking payout statements (for seasoned STRs), or (3) an STR-specialized Appraiser Form 1007 rent schedule.
To use 100% of a newly appraised After-Repair Value (ARV) on a DSCR cash-out refinance, wholesale shelves require either 6 months of title seasoning, or 3 months of seasoning with documented renovation receipts. Prior to 90 days, Delayed Financing allows up to 75% LTV capped at 100% of total acquisition + documented rehab cost.
To achieve 100% tax deferral in an IRC § 1031 exchange, you must (1) reinvest 100% of net cash proceeds held by your Qualified Intermediary (QI) and (2) replace equal or greater mortgage debt on the replacement property(ies) within the strict 45-day identification and 180-day closing deadlines.