Carmel is an Indianapolis suburb very close to the city. It is known for being home to one of the first electronic automated traffic signals in the state, and having so many roundabouts it’s labeled the “Roundabout Capital of the U.S.” In a 2019 ranking by Money, Carmel ranked #3 on the best places to live in America. It’s a great place to settle down and raise a family and a lot of people think that way — since 1990, the population of Carmel has tripled.
Niche ranked Carmel as the best place to live in Indiana, hands down. Like neighboring Fishers, Carmel is a rapidly growing suburb with a lot of people who own their homes. It is home to a lot of families, and many in Carmel also migrate to the suburb for its terrific public schools. Carmel right now has median home and rent values well above the rest of the state, but for the quality of living, Carmel is affordable compared to other upscale suburbs around the country.
Right now, Carmel is a very strong seller’s market. Demand is outpacing supply in Carmel, and homes are selling faster and for a higher price. Real estate investors in Carmel can easily get into bidding wars for desirable properties.
As a result, hard money loans might be the best way to invest in real estate in Carmel. Hard money loans are also known as short term bridge loans and last resort loans, but their biggest advantage, particularly in a seller’s market, is their fast speed of approval. Hard money loans can be approved within a couple days, as opposed to traditional mortgage loans, which can take more or less a month to be approved.
The reason hard money loans can be approved so quickly is because they’re based on the property as the asset. In particular, they’re based on the after-repair value of the property, which is important to note because many properties that use hard money loans are in disrepair. Hard money loans mostly used for real estate transactions, and they’re used for fix and flips, long-term rentals, and repairs of distressed properties.
By contrast, traditional financing through mortgage loans is mainly used for homeownership. It is also based on the financial standing of the applicant, and relies on metrics like credit score.
It’s not like financial standing does not matter in a hard money loan. The majority of hard money lenders require minimum credit scores of 600 to 620.
But since the hard money lender uses the property as collateral, if a borrower defaults on a hard money loan, the lender takes on the property, which is different from a foreclosure where the bank undergoes judicial proceedings.
This means hard money loans are inherently risky. They come with drastically higher interest rates, lower LTV ratios, and shorter repayment periods than traditional loans. They can be very hard to pay off if the real estate transaction does not work out.
It’s also important not to trust any hard money lender. Some hard money lenders tack on extraneous fees, while others do not communicate well about fees like closing costs, origination fees, and underwriting fees. New investors in particular have to be careful because mot every hard money lender gives to new investors given they require successful track records of investments.
At Hard Money Lenders IO, we have you covered. Here are the best hard money lenders in Carmel.