Indiana is another state in the U.S. that’s a terrific place to invest in real estate. It is the famous home to the Indianapolis 500, the Indianapolis Colts, and other parts of the “Hoosier State.” Indiana is also a state that’s very affordable as well as having the 16th best economy in the nation. It is one of the best states for steel production, much like the rest of the midwest, and is a the top state in the country for the production of cars.
Indiana is home to many metropolitan areas that are attractive places to buy rental properties, like Indianapolis, Evansville, South Bend, and Bloomington. According to Tyler Jahnke at Roofstock, Indianapolis especially is a city with soaring population growth, job growth, a diverse economy, and more. Indianapolis is certainly the hottest real estate market in Indiana, but other markets also are attractive places to invest.
Like Ohio, Indiana is very affordable.
Hard money loans might be the best way to invest in real estate in Indiana. Hard money loans are also known as short-term bridge loans or last resort loans, but they are mostly used for real estate transactions. They can be used for fix and flips, long-term rentals, and construction projects.
The biggest advantage of hard money loans, particularly in seller’s markets, is their fast speed of approval. Hard money loans can be approved much quicker than traditional mortgage loans. They can be approved within a couple of days, whereas traditional mortgage loans can take more or less a month to be approved.
The reason hard money loans can be approved so quickly is that they’re based on the property, especially the after-repair value of the property, whereas mortgages depend. on the financial standing. of the applicant and metrics like a credit score.
Hard money loans are accessible to investors without good credit — it’s not like credit score does not matter (most hard money lenders require an average credit score of 600 to 620), but the hard money lender uses the property as collateral. If a borrower defaults on a hard money loan, the lender takes on the property, which differs from the foreclosure proceedings that take place if a borrower defaults on a mortgage.
Hard money loans also have plenty of risks as a result. They come with higher interest rates than traditional mortgage loans, but also come with lower LTV ratios and shorter repayment periods. On average, hard money loans have interest rates of 8–15%, repayment periods of more or less a year, and LTV ratios around 70–80%. This can make them very difficult to pay off if a real estate investment does not generate its projected profit, and many real estate investors recommend leaving hard money loans to the pros as a result.
New investors can use hard money loans, but most lenders require successful real estate investing experience. It’s important to also be careful about using hard money loans because not every lender is trustworthy — some may have reputations as “loan sharks” because of extra fees on signing, like origination fees, closing costs, and underwriting fees. It’s important to only find hard money lenders you can trust.
Here at Hard Money Lenders IO, we have found the best hard money lenders in Indiana to get you started investing in the Hoosier State