Anderson is the county seat of Madison County, Indiana. It is the headquarters of Anderson University, as well as the Church of God. As of 2010, the population of Anderson was 56,129, and the city has a reputation as a great place to retire. Anderson gives a suburban feeling and has significant green space and parks. It also is a place where most residents own their homes.
According to Niche, the median home value of Anderson is $72,900, and the median rent is $757. These are values well below the national average. It is one of the most diverse suburbs in Indiana, with many diverse restaurants, and is close enough to the Indianapolis area to commute.
Right now, Anderson is a seller’s market. Prices are higher and homes are selling faster. Demand is outpacing supply in Anderson, which makes getting bids in quickly very crucial to being able to buy a home in the city.
Hard money loans might be the answer for real estate investing in Anderson. Hard money loans are loans mostly used for real estate transactions, and they are otherwise known as last resort loans. They can be used for fix and flips, construction projects, long-term rentals, and more. They are predominantly used for repairs of distressed properties and fix and flips especially, and are used by real estate investors because they do not depend on the credit of the borrower.
Hard money loans have the huge advantage of a fast closing speed. They can be approved much faster than traditional mortgage projects. They can be approved so quickly because they’re based on the property and the after-repair value of the property, not credit score. It’s not like credit score does not matter — hard money loans often require minimum credit scores of 600 to 620.
However, the property is the collateral, and hard money loans are different from traditional mortgage loans in the sense that if a borrower defaults on a mortgage, the property is foreclosed. However, if a borrower defaults on a hard money loan, the lender takes on the property, which can result in profit for the lender but also risk.
Hard money loans have plenty of cons and disadvantages. They’re called last resort loans for a reason. Hard money loans tend to have steep interest rates of 8–15%. They also have short repayment periods of more or less a year, and they also have LTV ratios of 70–80%, which means borrowers have to put down a large portion of a downpayment. By contrast, mortgages have interest rates just above 4%, and they have repayment periods of 15 to 30 years.
But it’s important not to just trust any hard money lender. Not every hard money lender is trustworthy, and new investors are especially vulnerable to working with untrustworthy lenders because most hard money lenders require at least a couple of successful fix and flips before lending to a borrower. Some lenders might tack on extra fees like origination fees and closing costs, and other lenders might not communicate well with the borrower. Foreign nationals might also have a very hard time getting hard money loans due to documentation requirements of loans.
Hard Money Lenders IO has made a list of the best hard money lenders in Anderson. Look no further to find a great financing partner for your real estate transaction.