Hilo is a popular tourist destination in Hawaii, but it’s also a growing place to invest in real estate. It has famously been known for its sugar plantations but recently, Hilo is more well known for being home to two volcanos and astronomy centers. Hilo has a population just under 50,000. It is a very diverse place with great schools and is a gray place to raise a family.
Hilo is located in Hawaii County and is a place with a very suburban feel. Like the rest of Hawaii, Hilo is home to many retirees and young professionals. Also like the rest of Hawaii, it isn’t easy to buy a home in Hilo, but it is a more affordable town than the rest of the state. According to Niche, Hilo has a median home value of $329,200 and a median rent of $1,045. Hilo feels like a small town and is considered one of the best places to live in Hawaii. It is also home to two higher education institutions: the University of Hawaii at Hilo and the Hawaii Community College.
Right now, Hilo is a seller’s market. The price of homes in the town has been rapidly increasing in the last year, and demand is rapidly outpacing supply. Hilo is also a place where homes are selling fast and for above listing price. Like the rest of Hawaii, real estate might get into bidding wars investing in the Hilo market.
Hard money loans might be the best way to invest in real estate in Hilo. They’re otherwise known as last resort loans or short-term bridge loans, but hard money loans are especially advantageous in a seller’s market like Hilo due to their extremely fast speed of approval. Hard money loans can be approved within days, while traditional mortgage loans can take around a mom h to be approved. In a seller’s market, their speed of approval is very beneficial because investors can put money down and be instantly competitive. Hard money loans help investors compete in these bidding wars with other investors.
The reason hard money loans can be approved so quickly is that they’re not as regulated as traditional mortgage loans, and they also use the property as the asset rather than the financial standing of the applicant. Hard money loans use the after-repair value of the property to calculate the rates and terms of the loan. They also use the property as collateral, so the process in case the borrower defaults is very different from when a borrower defaults in a foreclosure. In a foreclosure, a borrower defaulting on the loan leads to costly and lengthy judicial proceedings. But in a hard money loan, a default leads to the lender taking on the property and becoming the owner.
This can be extremely risky to the hard money lender, so hard money loans have much more unforgiving rates than mortgages. Hard money loans have higher interest rates, shorter repayment periods, and lower LTV ratios than traditional mortgage loans. They have interest rates of 8–15%, repayment periods of more or less a year, and LTV ratios around 70%. These are all worse rates than mortgages, which tend to have lower interest rates and longer repayment periods on average.
When selecting a hard money lender, choosing the best is important. That’s how we can help at Hard Money Lenders IO — we have made a list of the best hard money lenders in Hilo.
