Columbus is known as the famous home of the Ohio State University, and as a college town, it is a very hot real estate market. As an attractive market for both students, academics, and others who work for such a big university, Columbus is one of the hottest housing markets not only in Ohio, but the country. It is an extremely affordable city like the rest of Ohio, and is a diversified economy.
Columbus is also the capital of Ohio and considered one of the best places to live in the state. With a population of 878,533, Columbus is the biggest city in Ohio and the second biggest city in the Midwest, right behind Chicago. It is home to a lot of young professionals, as well as a thriving nightlife. Most people in Columbus rent their homes, and the city is experiencing dramatic population growth.
This population growth is making it a very attractive real estate market, as is Columbus’s location in the country. The city is a one-day drive or one-hour flight from 80% of corporate headquarters in the U.S., according to Jeff Rohde at Roofstock. It is a very strong renter market as a result.
Right now, Columbus is a very strong buyer’s market. The supply of homes is greater than demand, and this leads to many investors not having the pressure to bid on bidding wars. This makes Columbus a very strong renter’s market because real estate investors have a significant incentive to make a property as attractive as possible to potential renters.
In a buyer’s market, hard money loans can be very beneficial as a tool to rehabilitate properties. Hard money loans are also known as short-term bridge loans or last resort loans, but they can also be used for fix and flips, long-term rentals, and repairs of distressed properties.
In seller’s markets, hard money loans are advantageous because they can be approved within a couple of days, as opposed to traditional mortgage loans which can take up to a month to be approved. The reason hard money loans can be approved so quickly is that they are based on the after repair value of the property, not the credit score of the borrower. Hard money loans use the property as collateral, which means if a borrower defaults on a hard money loan, the lender takes on the property.
In buyer’s markets, hard money loans can be used as “cash” to pay for cash-only properties. Cash-only in real estate means a property did not qualify for traditional financing. It means the property is usually in a state of disrepair or distress a bank won’t touch the property. Hard money loans were specifically designed for these distressed properties, and rehabilitating them to make them attractive for renters could be very lucrative for real estate investors in Columbus.
However, it’s important to note hard money loans also have plenty of risks. They have lower LTV ratios, shorter repayment periods, and higher interest rates than traditional mortgage loans. As a result, if a real estate investment does not pan out, hard money loans can be hard to pay off. Experienced real estate investors often use hard money loans, but new investors can get hard money loans as well (although lenders often require a successful track record of investing).
Not every hard money lender is trustworthy and many might tack on extra fees like underwriting costs, closing fees, and origination fees. It’s important to find a very reliable hard money lender for your real estate investing journey.
At Hard Money Lenders IO, we have you covered. We have found the best hard money lenders in Columbus so you can acquire the best financing for your real estate investment.