Kettering is a city located in both Montgomery and Greene counties and is known as a suburb of Dayton. It is the largest suburb within the Dayton metropolitan area. The town is named after inventor Charles J. Kettering, who held over 186 patents and lived in the town.
Right now, Kettering is a strong buyer’s market. This means demand is rapidly outpacing supply in Kettering. Like the rest of Ohio, Kettering is a very liveable city, ranked very highly in the country, and is a very affordable place to live relative to the rest of the country. Most people own their homes in Kettering, and the median home value and median rent in the suburb are well below the national average.
Hard money loans might be the best way to invest in real estate in Kettering. Hard money loans are also known as short term bridge loans or last resort knowns. They are used for fix and flips, long-term rentals, repairs for distressed properties, and construction projects. They are advantageous usually for their fast speeds of approval, but hard money loans can also be beneficial because they can qualify for cash in cash only properties.
Cash only in real estate means a property is in a state of such disrepair most traditional lenders won’t touch the home. It obviously also means the buyer does not take traditional financing and won’t take cash, but many sellers take hard money loans as cash. By definition, hard money loans are designed to rehabilitate distressed properties, so in a strong buyer’s market, it’s especially important to make a property more attractive than the rest of the housing market.
Hard money loans can help with these rehabilitation projects and making a property stand out.
However, hard money loans can be approved so quickly and touch properties traditional financing does not because they are based on the property, not credit. To be clear, most hard money lenders still require a minimum credit score of 600 to 620, but hard money loans depend on the after-repair value of the property more than they do the borrower’s financial position. The hard money loan uses the property as collateral, which means the hard money lender takes on the property if the borrower defaults on the property.
There are significant risks of a hard money loan as a result. They come with lower LTV ratios, higher interest rates, and shorter repayment periods than traditional loans. They can be very expensive and difficult to pay off if the borrower does not have a good strategy for paying off the loan. That’s why many real estate investors suggest hard money loans be left to the professionals, because they can have unforgiving interest rates of 8–15%.
It’s also important to trust only the most reliable and reputable hard money lenders. Some have a reputation for tacking on extra fees that aren’t revealed until signing, like closing costs or underwriting costs. New investors are especially vulnerable since most hard money lenders only give to investors who have a successful track record of investing. It’s important to do your research to find trustworthy lenders in your local area.
At Hard Money Lenders IO, we have you covered in finding the best hard money lenders in Kettering, to pair you with the best lender for your real estate investing journey.