Fort Wayne is the county seat of Allen County, Indiana, and the second biggest city in Indiana. It is located in the northeast corner of the state, close to both Ohio and Michigan. According to the 2020 Census, Fort Wayne has 263,886 people, and Fort Wayne is considered a very historic city that is the heart of northeastern Indiana. It was named after an American Revolutionary War general, Anthony Wayne.
Fort Wayne is known as a very affordable city. It has terrific value. According to Niche, the median home value is $115,100, and the median rent is $764. It is the city with the lowest cost of living in America, and this affordability is appealing to real estate investors all over the country. Fort Wayne has a suburban feel and is home to many families and young professionals. It has above average public schools, and most people in the city own their homes.
Right now, Fort Wayne is a seller’s market, which means prices are high and homes are selling fast. It also means demand is outpacing supply in the city. Real estate investors and buyers in Fort Wayne may get into bidding wars over competitive properties, and getting an offer in quickly is essential to buying property in Fort Wayne.
Hard money loans might be the answer to real estate investing in the city. The biggest advantage of hard money loans in a seller’s market like Fort Wayne is their very fast speed of approval. Hard money loans can be approved within a couple of days, compared to traditional mortgage loans, which can take more or less a month to be approved. Hard money loans can almost instantly give real estate investors money to be competitive for a desirable property.
Hard money loans are also known as short-term bridge loans or last resort loans. They are mainly used for real estate transactions, and mainly also used for fix and flips, long-term rentals, construction projects, and repairs of distressed properties. Hard money loans can be approved so quickly because they’re based on the property, not the credit score or the financial standing of the applicant, like traditional financing. Hard money loans are based on the property and its after-repair value. Since they use the property as both the collateral and the asset, if a borrower defaults on a hard money loan, the lender owns the property, which can result in tremendous profit or loss.
As a result, hard money loans are incredibly risky. They have high interest rates of 8–15%, which are much higher than the just over 4% interest rates of traditional mortgage loans. They also have short repayment periods of more or less a year, which are much shorter than repayment periods for traditional financing, which can go up to 30 years. Lastly, hard money loans have lower LTV ratios than traditional financing, which makes them require larger down payments from borrowers.
It’s also important not to just trust any hard money lender. Not every hard money lender is trustworthy, and some tack on extra fees. Others are not transparent about fees upon signing, like underwriting fees, closing costs, and origination fees.
Hard Money Lenders IO has made a list of the best hard money lenders in Fort Wayne so you can find the best financing partner for your real estate investment.
