Evansville is the county seat of Vanderburgh County, Indiana, and the third biggest city in the state after Indianapolis and Fort Wayne. It’s the biggest city in Southern Indiana and borders Illinois and Kentucky. It has a population of over 115,000, and most people own their homes in Evansville. It is known for having a lot of green space as well as having a suburban feeling. It is also home to many higher education institutions, including the University of Evansville, the University of Southern Indiana, and the Indiana University School of Medicine.
Evansville is very affordable — it has a median home value of $94,200 and a median rent of $774, which are both well below the national average. Most people own their homes in Evansville, and right now, the housing market in Evansville is booming. Houses are selling very quickly and for high prices in this present housing bubble.
Right now, Evansville is a very strong seller’s market, which means demand is rapidly outpacing demand in the city. Buyers may get into bidding wars to purchase property in the city.
To invest in real estate in Evansville, hard money loans might be the answer. Hard money loans are also known as short-term bridge loans or last resort loans, but they’re mostly used for real estate transactions. They are used for fix and flips, long-term rentals, construction projects, and repairs of distressed properties.
Hard money loans have a huge advantage in housing bubbles and seller’s markets of fast speeds of approval. They can be approved within a couple of days, which is a huge advantage in a seller’s market. By contrast, traditional financing can take a month to approve a mortgage.
Hard money loans can be approved with such speed because they’re based on the property — particularly the after repair value of the property. Mortgages are based on the credit score of the borrower and other elements of the borrower’s financial standing, but hard money loans use the property as the asset and collateral. If a borrower defaults on a mortgage, the bank undergoes foreclosure proceedings. However, if a borrower defaults on a hard money loan, the lender takes on the property, which can result in profit or loss to the lender.
As a result, hard money loans are very risky. They have more risks than traditional financing. Some of these risks include higher interest rates than traditional mortgage loans. Hard money loans have interest rates between 8–15% on average, whereas traditional mortgage loans have interest rates just above 4% on average. Also, hard money loans have very short repayment periods. The majority of hard money loans have repayment periods of a year, whereas traditional mortgage loans can have repayment periods of 15 or 30 years. Lastly, hard money loans have shorter LTV ratios, which means they require a greater down payment on a property from the borrower.
Not every hard money lender is trustworthy, so it’s essential to be selective when choosing a hard money lender. Some hard money lenders tack on extraneous fees, and others might not communicate well about origination fees, closing costs, and underwriting fees. New investors especially have to be careful because most hard money lenders require successful real estate investments.
We have you covered at Hard Money Lenders IO. Here are some of the best financing partners and hard money lenders in Evansville.