Fayetteville is a city in Cumberland County, North Carolina, and is the famous home to Fort Bragg, a major U.S. Army base. It received the “All-America City Award” and is known as the “All-American City” and “The Soldier City” due to its robust military population. It is the sixth biggest city in North Carolina, and has a population of over 211,000 people. Fayetteville is more than just Fort Bragg, however. It has many retail markets and shops, the both the local school system and the Cape Fear Valley Health System are also major employers in the city.
According to Niche, Fayetteville gives its residents a dense suburban feel and is home to lots of parks and green space. It is a place most people rent their homes, and is home to many families and young professionals. It has great public schools, and has a median home value of $134,800 and a median rent of $960.
Right now, Fayetteville is a seller’s market. It is a place where demand is outpacing supply, and real estate investors are getting into bidding wars over real estate and optimal housing. There just isn’t enough housing to meet demand in Fayetteville. Real estate investors are encountering homes that sell fast and for higher than listing price.
Hard money loans might be the best way to invest in real estate in Fayetteville for real estate investors. Hard money loans are also known as short-term bridge loans and last resort loans, and their biggest advantage in such a competitive rental market is they can be approved very rapidly. While traditional mortgage loans can take a month or more to be approved, hard money loans take a couple days to be approved. This very fast speed of approval is essentially money in the real estate space. It gives real estate investors an instant advantage over other investors.
The reason hard money loans can be approved so quickly is they’re based on the property, not the credit score of the borrower. Hard money loans are based on the after repair value of the property for the terms and rates of their loans. They do depend on credit score minimums, as they usually won’t lend to any investor with a credit score below 600. Also, a good credit score is often the basis for getting better interest rates. Hard money loans use the property as collateral — if a borrower defaults on a hard money loan, it’s a very fast process where the lender becomes the homeowner. Every hard money lender prepares themselves for this possibility before approving a borrower for a hard money loan.
Hard money loans hence have a lot of risks and disadvantages. They come with higher interest rates, shorter repayment periods, and lower LTV ratios compared to traditional mortgage loans. They have interest rates of 8–15%, repayment periods of more or less a year, and LTV ratios of 65–75%. This means they’re very difficult to pay off if the real estate investment does not pan out. By contrast, traditional mortgage loans have interest rates of 4% on average, repayment periods of about 30 years, and LTV ratios of 80%.
It’s essential to only trust the very best hard money lenders. Some hard money lenders have reputations as loan sharks because they tack on extra points and fees. That’s why we at Hard Money Lenders IO have compiled a list of the best hard money lenders in Fayetteville.