Cincinnati is the third biggest city in Ohio, with a population of over 300,000. It is considered one of the best places to live in Ohio where people rent their homes. People find lots of bars, restaurants, and coffee shops in the city and most people rent their homes. It is also a city that is known as the “Queen City of the West,” home to many sports teams and having one of the best economies in the region.
Right now, Cincinnati is a major seller’s market and is known as the fastest-growing economy in the Midwest. The workforce is growing rapidly, and the city is such a strong renter’s market that homes are staying on the market for only five days. Demand is rapidly outpacing supply in Cincinnati, and the housing inventory can’t keep up with the growing migration to the city.
Cincinnati is one of the hottest place to invest in real estate within the city of Ohio. It has a great quality of life, and like the rest of Ohio, is a very affordable market. According to Niche, Cincinnati has a median home value of $138,000 and a median rent of $738, which are well below the national average.
Hard money loans might be the best place to invest in real estate in Cincinnati. They are used for fix and flips, construction projects, long-term rentals, and more. The biggest advantage of a hard money loan, especially in a seller’s market where the average home is only on the market for five days, is the fast speed of approval. Hard money loans can be approved within a matter of days, compared to traditional mortgage loans which can take a month to be approved due to all the documentation required.
This fast speed of approval is especially beneficial in a seller’s market. Hard money loans can be approved so quickly because they are based on the after-repair value of the property, not the financial standing of the borrower. Since they use the property as collateral, if a borrower defaults on a hard money loan, the lender takes on the property, which is very different from foreclosure proceedings where a lengthy and costly process results for the bank.
Hard money loans have plenty of disadvantages as well since the lender incurs so much risk. First, they have higher interest rates than traditional mortgages. Hard money loans have an average interest rate of 8–15%, while mortgages have interest rates of just over 4% on average. Hard money loans also have short repayment periods of more or less a year, compared to 15 to 30 year mortgages. Lastly, hard money loans have lower LTV ratios than traditional loans, which means borrowers have to put down greater down payments than if they were using traditional financing.
It can be hard to find a trustworthy hard money lender since there are many unreliable lenders. Many may not communicate well about extra fees or tack on extraneous fees like closing costs and origination fees. New investors may encounter significant barriers in getting approved for a hard money loan since most require a successful track record of investing.
At Hard Money Lenders IO, we have found the best hard money lenders in Cincinnati so you don’t have to. Here are the best finances for your real estate investment.