Cleveland is the second biggest city in Ohio and one of the most popular cities in the state of Ohio. It has a population of over 300,000 people, and is the county seat of Cuyahoga County. Most people in Cleveland rent their homes, and Cleveland is a very affordable city — it has a median home value of $69,600 and a median rent of $719, which make Cleveland a very affordable city compared to the national average.
According to Jeff Rohde on Roofstock, Cleveland is a soaring rental market right now. It is very competitive with some homes going under contract on the very same day the home is listed on the market. While Cleveland has historically relied on manufacturing as its primary industry, the economy has diversified significantly since then.
Cleveland is thought of as one of the best cities in America to buy a home. It is very affordable to real estate investors and renters due to Cleveland being such a recession-resistant market. Right now, Cleveland is a balanced market where demand and supply of homes are the same, but many investors are trying to get in on the Cleveland market, especially for very competitive properties.
Hard money loans might help a real estate investor get started investing in Cleveland. Hard money loans are also known as last resort loans or short-term bridge loans, but they can often be used for fix and flips, long-term rentals, construction projects, and repairs of distressed properties. They are used for real estate projects primarily, and the biggest advantage of hard money loans is they can be approved very quickly.
Hard money loans can be approved within a couple of days and be used flexibly by an investor, whereas traditional mortgage loans can take more or less a month to be approved, and money from a mortgage is very rigid.
The reason hard money loans can be approved so quickly is they are based on the property and the after-repair value of the property specifically, not the credit score of the borrower. To be clear, credit still matters — most have minimum credit score requirements. But hard money loans use the property as collateral, and if a borrower defaults on a hard money loan, the lender takes on the property.
This is a risky proposition for both the lender and the borrower. As a result, hard money loans have higher interest rates, lower LTV ratios, and shorter repayment periods than traditional mortgage loans. Traditional mortgages can be paid off in 15 or 30 years, and on average, they have interest rates just above 4%. Hard money loans by contrast often need to be paid off within a year and have interest rates of 8–15%. They often require greater buy-in from the real estate investor in terms of down payment.
Hard money loans can sometimes be best left to professional, experienced investors since new investors can have a lot of barriers getting hard money loans to begin with. Also, not every hard money lender is trustworthy. Some add extra fees like origination fees and closing costs that are not well-communicated to the borrower.
To find reliable and reputable hard money lenders in Cleveland, Hard Money Lenders IO has compiled a list of the best hard money lenders in the city to give the best rates and terms possible.