Greenwich is a town in southern Connecticut, located in Fairfield County. It is known as one of the wealthiest cities in America and is known as the “hedge fund capital” of America.
It is also a New York City suburb, known for terrific public schools and a great place to raise a family. With a population of just over 60,000, Greenwich is considered one of the best places to live in the state. It is a suburb where most residents own their homes, and it is a very expensive place to invest in real estate. The median home value of Greenwich was $1,251,200 and the median rent was $1,910. Many people who work on Wall Street live in Greenwich, so recently, home values in Greenwich just keep rising, as many people want to leave New York City, but simultaneously be close to the city.
This has especially been a trend during the COVID-19 pandemic, as Greenwich has seen an increase in both home buyers and renters. Many people migrated to the suburbs to buy high-end and luxury homes in Greenwich and surrounding areas,
Right now, Greenwich is a strong seller’s market, like the rest of Fairfield County. This means demand is outpacing supply in Greenwich. Prices are higher and homes tend to sell faster, which means real estate investors might get into bidding wars to compete for homes in Greenwich.
Hard money loans might be the best way to invest in real estate in Greenwich. Hard money loans are otherwise known as short term bridge loans or last resort loans, but their biggest advantage in a seller’s market like Greenwich is their fast speed of approval. Hard money loans can be approved by lenders in a couple of days since they’re largely unregulated, while traditional mortgage loans from banks can take more or less a month to be approved.
They can be approved so quickly because they’re based on the property, not the credit score of the borrower (like mortgages). This is not to say credit score does not matter, since most hard money lenders require minimum credit scores of 600 to 620. However, hard money loans use the property as collateral. If a borrower defaults on the property, the hard money lender takes on the home, which can result in significant profit but also significant risk.
Hard money loans come with some significant risks coupled with their fast speed of approval. They have higher interest rates of approximately 8–15%, shorter repayment periods of more or less a year, and lower LTV ratios than traditional loans. By contrast, traditional mortgage loans have higher LTV ratios, repayment periods of 15 to 30 years, and average national interest rates of just over 4%.
It’s important to be especially selective and careful in finding a good hard money lender, since not every lender is trustworthy. Some tack on extra fees upon signing that are not well communicated to the borrower, like origination fees, closing costs, and underwriting fees. It can be especially difficult to secure a hard money loan as a new investor, since most hard money lenders require a successful track record of fix and flips or other kinds of investments.
At Hard Money Lenders IO, we have you covered in finding the best hard money lenders in Greenwich. These are the best financing partners for your real estate investment.