Alaska is a great place to invest in real estate right now. It has cities as well as rural areas, and the best thing about a buying a home in Alaska is it is extremely affordable. Alaska public schools are excellent, for the K-12 system as well as higher education. There is also a strong job market for tourism and fishing, and Alaska is known for its incredibly laid back, easy-going lifestyle that the rest of the U.S. Petroleum, however, is the most popular industry, and the state has seen substantial job growth recently.
There are many places to invest in real estate in Alaska, including Wasilla, the home to Sarah Palin, Juneau, the capital of Alaska, and Anchorage, the urban center of the city, Homer, an affordable mountain town that attracts tourists, and Fairbanks, the home to the University of Alaska’s flagship campus. The University of Alaska has three campuses across Anchorage, Fairbanks, and Juneau. With home values so affordable and such a robust job market between forestry, petroleum, tourism and fishing, Alaska is a great place to invest in real estate.
Right now, during the pandemic, Alaska has been a major seller’s market. Demand is rapidly outpacing supply in Alaska, and many homebuyers have been having a hard time buying real estate in the sate. With a housing bubble, many people are bidding prices well above asking price. Homes are also selling very fast.
Hard money loans might be the best way to invest in real estate in Alaska. Hard money loans are mostly used for real estate transactions, particularly fix and flips, long-term rentals, and construction projects. Hard money loans have a huge advantage in sellers markets. They can be approved very quickly in a matter of days, which differs substantially from traditional mortgage loans which can take more or less a month to be approved. Hard money loans are also more flexible and have more transparency to the lender.
The reason hard money loans can be approved so quickly is the asset they’re based on. Hard money loans are based on the property and the after repair value of the property, not the credit score of the borrower or any other aspect of the financial standing of the borrower. Hard money loans use the property as collateral. If a borrower defaults on a mortgage, there is a foreclosure, but hard money loans are different because if a borrower defaults, the lender takes on the property.
Hard money loans also come with significant risks as a result. They have much more unforgiving terms than traditional mortgages. They have higher interest rates, lower LTV ratios, and shorter repayment periods. Hard money loans have interest rates of about 8–15%, which is significantly higher than interest rates of traditional mortgage loans. Also, hard money loans have repayments periods of more or less a year, which is also more unforgiving than traditional loans. Lower LTV ratios for hard money loans mean real estate investors have to put down higher down payments than they would for traditional lenders.
It’s important to only trust the most trustworthy hard money lenders, since many might tack on extra fees or not communicate well about the terms, rates, and signing fees of loans. New investors in particular are vulnerable to bad loans since not every hard money lender will lend to new investors.
At Hard Money Lenders IO, we have compiled a list of the best hard money lenders in Alaska.