Bowling Green is the third biggest city in the state of Kentucky. With over 72,000 people, it lags only behind Lexington and Louisville. Bowling Green is considered one of the best places to live in Kentucky, with excellent schools. Like the rest of Kentucky, Bowling Green is incredibly affordable, with median home values and rents well below the national average.
More people in Bowling Green rent homes than own them. It is a city with a suburban feeling, one well-known for a lot of caves, as well as Western Kentucky University. It’s also known for the Corvette Museum.
Right now, Bowling Green is a soft seller’s market, which means there is a lot of housing demand and not enough supply to meet that demand. This lack of inventory is important because there are more buyers than sellers in Bowling Green. Homes are selling fast, and for a higher price than listing price.
Hard money loans might be the answer for real estate investing in Bowling Green. Hard money loans are mostly used for fix and flips, long-term rentals, construction projects, and repairs of distressed properties. The biggest advantage of a hard money loan is its swift speed of approval, especially relative to a traditional mortgage loan. A mortgage loan often takes a month or more to be approved based on the documentation required. The biggest factor in a traditional bank loan is the financial position of the applicant.
To put down a competitive offer, speed is often money, particularly when using hard money loans. Hard money loans give a fast speed of approval to help you be seen as a legitimate buyer in the Bowling Green market. Especially for cash only properties, hard money loans are an excellent resource to repair distressed properties.
However, hard money loans are not based on the credit of the borrower, even if most hard money loans have credit minimums of 600 to 620. They are based on the property and use the property as collateral, as opposed to using the credit of the borrower. If a borrower defaults on a hard money loan, the lender takes on the property. This means a hard money lender needs to determine whether a property can pay off a hard money loan itself.
Hard money loans also have significant risks to go along with their advantages. They have higher LTV ratios, interest rates, and shorter repayment periods. This means if a real estate investment does not work out, the hard money loan is very difficult to pay. Compared to traditional loans, hard money loans are more expensive and need to be repaid in a shorter period of time.
There’s a reason hard money loans are known as last resort loans, and best left to the professionals. They can be very difficult to pay off, and every real estate investor needs a good strategy for paying off a hard money loan. New investors often counter significantly more barriers than professional investors, since most hard money lenders require a successful track record of successful investments.
Not every hard money lender is trustworthy. Some might tack on extra fees or not reveal every additional fee when the borrower is signing off on the loan. It’s important to only trust hard money lenders who are reliable and experienced.
At Hard Money Lenders IO, we have made a list of the best hard money loans in Bowling Green. These are the best partners in your real estate investment journey.