Great Falls is the third biggest city in Montana with a population of just over 60,000, according to the 2020 census. It is known as “The Electric City” due to the various hydroelectric dams and waterfalls in the area, and Great Falls is named Great Falls due to the five waterfalls on the Missouri River just east and north of the city. It is a small town and a very convenient place to invest in property, and it is also a place with a very affordable cost of living.
In particular, Great Falls is a hot rental market. Great Falls is considered a place with great nightlife and diversity. It has good schools and is a great place to raise a family. Great Falls is home to a variety of young professionals and young families, and has a dense suburban feel, according to Niche. It has a median home value of $176,500 and a median rent of $729, which makes Great Falls very affordable compared to the national average. It is one of the most diverse places to live in Montana.
Right now, Great Falls is a seller’s market, and in the past three years, the median days of homes on the market were 43 days. Homes in Great Falls are selling fast and for higher than listing price. Demand is outpacing supply in the city. Real estate investors need to put down offers and money fast to invest in property.
As such, hard money loans might be the best way to invest in real estate in Great Falls. Hard money loans are predominantly used for real estate transactions like fix and flips, long-term rentals, and construction projects. They have a huge advantage in their speed of approval, especially in seller’s markets like Great Falls.
Hard money loans can be approved in a couple of days, which is drastically faster than traditional mortgage loans, which can take a month or more to be approved.
Hard money loans can be approved so quickly because of the asset they’re based on — the property. While traditional mortgage loans are dependent on the financial standing and credit score of the applicant, hard money lenders base terms of loans on the after-repair value of the property. While hard money lenders still require minimum credit scores of 600 to 620, they use the property as collateral. If a borrower defaults on a hard money loan, the lender takes on the property, which is a faster and easier process than lengthy and expensive foreclosure proceedings.
This means hard money lenders also incur significant risks, and these risks are reflected in the terms and rates of hard money loans. Hard money loans have interest rates of 8–15%, which are significantly higher than mortgage loans, which have an average interest rate of just over 4%. They also have repayment periods of more or less a year, which is significantly shorter than the repayment periods of mortgage loans (15 to 30 years). With lower LTV ratios, hard money loans also require higher down payments than traditional mortgage loans.
However, not every hard money lender is trustworthy. Some may tack on extraneous fees like origination fees, closing costs, and underwriting fees. New investors are particularly vulnerable to scams because most hard money lenders require a successful history of real estate investments.
So it’s important to only trust the best hard money lenders. At Hard Money Lenders IO, we have you covered in finding the best hard money lenders in Great Falls. Look no further for a financing partner for your real estate transaction.