Elyria is a suburb 23 miles outside of Cleveland, and about 23 miles southwest of Cleveland. It is located in Lorain County and is known for having a suburban feel. It is a very affordable suburb, the median home value is $99,100, while the median rent is $741. Most people in Elyria own their homes rather than rent their homes.
It is a very diverse place, as well as a competitive real estate market. In Elyria, homes are selling fast, and demand outpaces supply. Elyria is currently a strong seller’s market and in the last three years, the median days of homes on the market is 50 days.
Hard money loans might be the best way to invest in real estate in Elyria. Hard money loans are also known as bridge loans or last resort loans, but they’re used mainly for real estate transactions.
The biggest advantage of hard money loans is their fast speed of approval. While most traditional lenders take at least a month or more to approve a mortgage loan, most hard money lenders approve a loan within a couple of days. In a strong seller’s market like Elyria, time is money in real estate investing.
For the most part, a hard money loan is used for a distressed property. It is mainly used for fix and flips, repairs of distressed properties, long-term rentals, and construction projects.
The reason hard money loans can be approved so much quicker is because they’re based on the after repair value of a property, not the credit score of a buyer. To be clear, credit still matters with hard money loans. However, most hard money lenders still have minimum credit score requirements of 600 to 620.
The reason hard money loans can be approved so quickly is that they use the property as collateral. The after repair property of a loan is the basis for a hard money loan, and this means if a borrower defaults on a hard money loan, the lender takes on the property. The lender has to calculate whether the property can pay off a hard money loan.
This means hard money loans also come with significant risks. They come with interest rates of 8–15%, which are significantly higher than traditional loans. They also come with shorter repayment periods (usually of one year) than traditional loans, which have 15 to 30 year repayment periods. Lastly, hard money loans have LTV ratios that are much lower than traditional loans, which means investors have to put down higher down payments.
It’s important to be cautious when investing using hard money loans. An investor needs a good strategy for paying off a loan, and new investors, in particular, have to be careful because most hard money lenders require a successful track record of successful investments. For these reasons, hard money loans are best left to the professionals who know what they’re doing.
Not every hard money lender is trustworthy. Some come with extraneous fees like closing costs, underwriting fees, and origination fees. It’s important to only trust the most reliable and reputable hard money lenders.
Here at Hard Money Lenders IO, we have found hard money lenders for Elyria to be partners with you on your real estate investing journey. Look no further to find the best hard money lenders in Elyria.