Collierville is a Memphis suburb located in Shelby County, and it’s a one of the largest suburbs in the county outside Memphis and Bartlett. It’s known for having shopping mall Carriage Crossing, and Collierville is also known for having a very historic town square that labels it the “Best Main Street” in America. It is known for two big battles during the Civil War.
According to Niche, Collierville is one of the best places to live in the whole state of Tennessee. It’s the second best place to live in the Memphis area. Collierville is great for families and gives residents a rural feel. Most residents in Collierville own their homes, and the city is also known for lots of parks and green space. It is home to many families and great public schools. Right now, the median home value of Collierville is $319,300 and the median rent is $1331.
Right now, Collierville is a seller’s market. Homes tend to be sell fast and for higher than listing price, and a seller’s market means there’s not enough supply of housing to meet demand. Collierville is a housing market where real estate investors are getting into bidding wars over some of the best real estate in the state.
Hard money loans might be the best way to invest in real estate in Collierville. These loans are an alternative source of financing to traditional financing that use the property as the asset, rather than the credit score of the borrower. They are mainly used to fund repairs for flipping homes and then selling them for a higher price, in real estate transactions like fix and flips, long-term rentals, and construction projects. The biggest advantage of hard money loans in a housing market as competitive as Collierville is their very fast speed of approval. While traditional mortgage loans can take a month or more to be approved, hard money loans can be approved within a couple of days, which gives investors who use hard money loans an instant advantage over competitiors.
Hard money loans can be approved so quickly because they don’t have to jump through all the hurdles of traditional mortgage loans. While credit score still matters in terms of getting better interest rates and hard money lenders requiring credit score minimums of 600 to 620, the majority of hard money lenders use the property as collateral. If a borrower defaults on a mortgage, there’s a foreclosure. But if a borrower defaults on a hard money loan, the lender takes on the property.
This means hard money loans come with plenty of disadvantages because every hard money lender needs to prepare themselves for this possibility. Hard money loans have higher interest rate than mortgages. They have interest rates of 8–15%. Hard money loans also have shorter repayment periods — they need to be repaid within a year, which is significantly shorter than the 30 year repayment periods of most mortgages. Lastly, hard money loans have LTV ratios between 65–75%, which are much lower than the average 80% LTV ratios of mortgages. Simply put, hard money loans are more expensive and unforgiving than traditional mortgage loans, and can be very difficult to pay off if an investment does not pan out.
It’s essential for real estate investors to find the very best hard money lenders, which is why we at Hard Money Lenders IO have compiled a list of the best hard money lenders in Collierville for your real estate transaction.
